Labor Law Cases1

FIRST DIVISION
[G.R. No. 159890. May 28, 2004]

EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING & PARTS CORP. and JOSE LAMADRID,
President, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure assailing the Decision
dated March 7, 2003 of the Court of Appeals in CA-G.R. SP No. 73102 which affirmed the Resolution dated April 2,
2002 of the National Labor Relations Commission.
Petitioner was employed by respondent company Lamadrid Bearing and Parts Corporation sometime in June 1985
as a salesman earning a commission of 3% of the total paid-up sales covering the whole area of Mindanao. His average
monthly income was more or less P16,000.00, but later was increased to approximately P20,269.50. Aside from selling
the merchandise of respondent corporation, he was also tasked to collect payments from his various
customers. Respondent corporation had complete control over his work because its President, respondent Jose
Lamadrid, frequently directed him to report to a particular area for his sales and collection activities, and occasionally
required him to go to Manila to attend conferences regarding product competition, prices, and other market strategies.
Sometime in 1998, petitioner encountered five customers/clients with bad accounts, namely:
Customers/Clients
1)
2)
3)
4)
5)
A&B Engineering Services

Emmanuel Engineering Services
Panabo Empire Marketing
Southern Fortune Marketing
Alreg Marketing
Less Returns: 691.02
Total Bad Accounts
Amount
P 86,431.20
126,858.50
226,458.76
191,208.00
56, 901.18
56, 210.16
P 687,166.62
Petitioner was confronted by respondent Lamadrid over the bad accounts and warned that if he does not issue his
own checks to cover the said bad accounts, his commissions will not be released and he will lose his job. Despite serious
misgivings, he issued his personal checks in favor of respondent corporation on condition that the same shall not be
deposited for clearing and that they shall be offset against his periodic commissions. [1]
Not contented with the issuance of the foregoing checks as security for the bad accounts, respondents tricked
petitioner into signing two documents, which he later discovered to be a Promissory Note [2] and a Deed of Real Estate
Mortgage.[3]
Pursuant to the parties agreement that the checks would not be deposited, as their corresponding values would be
offset from petitioners sales commissions, respondents returned the same to petitioner as evidenced by the undeposited
checks and respondent Lamadrids computations of petitioners commissions. [4]
Due to financial difficulties, petitioner inquired about his membership with the Social Security System in order to apply
for a salary loan. To his dismay, he learned that he was not covered by the SSS and therefore was not entitled to any
benefit. When he brought the matter of his SSS coverage to his employer, the latter berated and hurled invectives at him
and, contrary to their agreement, deposited the remaining checks which were dishonored by the drawee bank due to
Account Closed.
On March 22, 2001, counsel for respondent corporation sent a letter to petitioner demanding that he make good the
dishonored checks or pay their cash equivalent. In response, petitioner sent a letter addressed to Atty. Meneses, counsel
for respondent corporation, which reads:[5]
This has reference to your demand letter dated March 22, 2001 which I received on March 30, 2001, relative to the checks I issued to
my employer LAMADRID BEARING PARTS CORPORATION.
May I respectfully request for a consideration as to the payment of the amount covered by the said checks, as follows:
1. I have an earned commission in the amount of P33,412.39 as shown in the hereto attached Summary of Sales as of February 28,
2001 (P22,748.60) and as of March 31, 2001 (P10,664.79), which I offer to be charged or deducted as partial payment thereof;
2. I hereby commit One Hundred Percent (100%) of all my commission to be directly charged or deducted as payment, from date
onward, until such time that payment will be completed;
Sir, kindly convey my good faith to your client and my employer, as is shown by my willingness to continue working as Commission
Salesman, having served the Company for the last sixteen (16) years.
Im sincerely appealing to my employer, through you, Sir, to settle these accountabilities which all resulted from the checks issued by
my customers which bounced and later charged to my account, in the manner afore-cited.
May this request merit your kindest consideration, Sirs.
Thank you very much.
On April 2, 2001, petitioner sent another letter to respondent Lamadrid, to wit: [6]
Dear Mr. Lamadrid,
This is to inform your good office that if you pursue the case against me, I may refer this problem to Mr. Paul Dominguez and Atty.
Jesus Dureza to solicit proper legal advice. I may also file counter charges against your company of (sic) unfair labor practice and
unfair compensation of 3% commission to my sales and commissions of more or less 90,000,000.00 (all collected and covered with
cleared check payments) for 16 years working with your company up to the present year 2001.
If I am not wrong your company did not exactly declare the correct amount of P90,000,000.00 more or less representing my sales and
collections (all collected and covered with cleared check payments to the Bureau of Internal Revenue [BIR] for tax declaration
purposes). In short your company profited large amount of money to (sic) the above-mentioned sales and collections of
P90,000,000.00 more or less for 16 years working with your company.
I remember that upon my employment with your company last 1985 up to the present year 2001 as commission basis salesman, I have
not signed any contract with your company stating that all uncollected accounts including bounced checks from Lamadrid Bearing &
Parts Corp. will be charged to me. I wonder why your company forcibly instructed me to secure checking account to pay and issue
check payment of P15,000.00 per month to cover your companys bad accounts in which this amount is too heavy on my part paying a
total bad accounts of more than P650,000.00 for my 16 years employment with your company as commission basis salesman.
Recalling your visit here at my Davao City residence, located at Zone 1 2nd Avenue, San Vicente Buhangin Davao City, way back
1998, you even forced me to sign mortgage contract of my house and lot located at Zone 1 2nd Avenue, San Vicente, Buhangin, Davao
City, according to Mr. Jose Lamadrid this mortgage contract of my house and lot will serve as guarantee to the uncollected and
bounced checks from Lamadrid Bearing and Parts Corp., customers. I have asked 1 copy of the mortgage contract I have signed but
Mr. Jose C. Lamadrid never furnished me a copy.
Very truly yours,
(Sgd) Empermaco B. Abante, Jr.
While doing his usual rounds as commission salesman, petitioner was handed by his customers a letter from the
respondent company warning them not to deal with petitioner since it no longer recognized him as a commission
salesman.
In the interim, petitioner received a subpoena from the Office of the City Prosecutor of Manila for violations of Batas
Pambansa Blg. 22 filed by respondent Lamadrid.
Petitioner thus filed a complaint for illegal dismissal with money claims against respondent company and its
president, Jose Lamadrid, before the NLRC Regional Arbitration Branch No. XI, Davao City.
By way of defense, respondents countered that petitioner was not its employee but a freelance salesman on
commission basis, procuring and purchasing auto parts and supplies from the latter on credit, consignment and
installment basis and selling the same to his customers for profit and commission of 3% out of his total paid-up
sales. Respondents cite the following as indicators of the absence of an employer-employee relationship between them:
(1) petitioner constantly admitted in all his acts, letters, communications with the respondents that his
relationship with the latter was strictly commission basis salesman;
(2) he does not have a monthly salary nor has he received any benefits accruing to regular employment;
(3) he was not required to report for work on a daily basis but would occasionally drop by the Manila office when
he went to Manila for some other purpose;
(4) he was not given the usual pay-slip to show his monthly gross compensation;
(5) neither has the respondent withheld his taxes nor was he enrolled as an employee of the respondent under
the Social Security System and Philhealth;
(6) he was in fact working as commission salesman of five other companies, which are engaged in the same line
of business as that of respondent, as shown by certifications issued by the said companies; [7]
(7) if respondent owed petitioner his alleged commissions, he should not have executed the Promissory Note
and the Deed of Real Estate Mortgage.[8]
Finding no necessity for further hearing the case after the parties submitted their respective position papers, the
Labor Arbiter rendered a decision dated November 29, 2001, the decretal portion of which reads: [9]
WHEREFORE, premises considered judgment is hereby rendered DECLARING respondents LAMADRID BEARING & PARTS
CORPORATION AND JOSE LAMADRID to pay jointly and severally complainant EMPERMACO B. ABANTE, JR., the sum of
PESOS ONE MILLION THREE HUNDRED THIRTY SIX THOUSAND SEVEN HUNDRED TWENTY NINE AND 62/100 ONLY
(P1,336,729.62) representing his awarded separation pay, back wages (partial) unpaid commissions, refund of deductions, damages
and attorneys fees.
SO ORDERED.
On appeal, the National Labor Relations Commission reversed the decision of the Labor Arbiter in a Resolution
dated April 5, 2002, the dispositive portion of which reads: [10]
WHEREFORE, the Appeal is GRANTED. Accordingly, the appealed decision is Set Aside and Vacated. In lieu thereof, a new
judgment is entered dismissing the instant case for lack of cause of action.
SO ORDERED.
Petitioner challenged the decision of the NLRC before the Court of Appeals, which rendered the assailed judgment
on March 7, 2003, the dispositive portion of which reads: [11]
WHEREFORE, premises considered, petition is hereby DENIED. Let the supersedeas bond dated 09 January 2002, issued the
Philippine Charter Insurance Corporation be cancelled and released.
SO ORDERED.
Upon denial of his motion for reconsideration, petitioner filed the instant appeal based on the following grounds:
I
THE HONORABLE COURT OF APPEALS IN GRAVE ABUSE OF DISCRETION MODIFIED THE IMPORT OF THE
RELEVANT ANTECEDENTS AS ITS PREMISE IN ITS QUESTIONED DECISION CAUSING IT TO ARRIVE AT ERRONEOUS
CONCLUSIONS OF FACT AND LAW.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN APPRECIATING THE TRUE FACTS OF THIS CASE
THEREBY IT MADE A WRONG CONCLUSION BY STATING THAT THE FOURTH ELEMENT FOR DETERMINING
EMPLOYER-EMPLOYEE RELATIONSHIP, WHICH IS THE CONTROL TEST, IS WANTING IN THIS CASE.
III
THE HONORABLE COURT OF APPEALS IS AT WAR WITH THE EVIDENCE PRESENTED IN THIS CASE AS WELL AS
WITH THE APPLICABLE LAW AND ESTABLISHED RULINGS OF THIS HONORABLE COURT.
Initially, petitioner challenged the statement by the appellate court that petitioner, who was contracted a 3% of the
total gross sales as his commission, was tasked to sell private respondents merchandise in the Mindanao area and to
collect payments of his sales from the customers. He argues that this statement, which suggests contracting or
subcontracting under Department Order No. 10-97 Amending the Rules Implementing Books III and VI of the Labor Code,
is erroneous because the circumstances to warrant such conclusion do not exist. Not being an independent contractor, he
must be a regular employee pursuant to Article 280 of the Labor Code because an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer.
Petitioner likewise disputes the finding of the appellate court that no employer-employee relationship exists between
him and respondent corporation since the power of control, which is the most decisive element to determine such
relationship, is wanting. He argues that the following circumstances show that he was in truth an employee of the
respondent corporation:
(1) As salesman of the private respondents, petitioner was also the one collecting payment of his sales from various customers. Thus,
he was bringing with him Provisional Receipts, samples of which are attached to his Position Paper filed with the Labor Arbiter.
(2) Private respondents had complete control over the work of the petitioner. From time to time, respondent JOSE LAMADRID was
directing him to report to a particular area in Mindanao for his sales and collection activities, and sometimes he was required to go to
Manila for a conference regarding competitions, new prices (if any), special offer (if competitors gave special offer or discounts), and
other selling/marketing strategy. In other words, respondent JOSE LAMADRID was closely monitoring the sales and collection
activities of the petitioner.
Petitioner further contends that it was illogical for the appellate court to conclude that since he was not required to
report for work on a daily basis, the power of control is absent. He reasons that being a field personnel, as defined under
Article 82 of the Labor Code, who is covering the Mindanao area, it would be impractical for him to report to the
respondents office inManila in order to keep tab of his actual working hours.
Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of
fact and that the findings thereon by the Labor Arbiter and the National Labor Relations Commission shall be accorded not
only respect but even finality when supported by substantial evidence. The decisive factor in such finality is the presence
of substantial evidence to support said finding, otherwise, such factual findings cannot be accorded finality by this Court.
[12]
Considering the conflicting findings of fact by the Labor Arbiter and the NLRC as well as the Court of Appeals, there is a
need to reexamine the records to determine with certainty which of the propositions espoused by the contending parties is
supported by substantial evidence.
We are called upon to resolve the issue of whether or not petitioner, as a commission salesman, is an employee of
respondent corporation. To ascertain the existence of an employer-employee relationship, jurisprudence has invariably
applied the four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four,
the last one is the most important. [13] The so-called control test is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an
employer-employee relationship exists where the person for whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to be used in reaching that end.
Applying the aforementioned test, an employer-employee relationship is notably absent in this case. It is undisputed
that petitioner Abante was a commission salesman who received 3% commission of his gross sales. Yet no quota was
imposed on him by the respondent; such that a dismal performance or even a dead result will not result in any sanction or
provide a ground for dismissal. He was not required to report to the office at any time or submit any periodic written report
on his sales performance and activities. Although he had the whole ofMindanao as his base of operation, he was not
designated by respondent to conduct his sales activities at any particular or specific place. He pursued his selling
activities without interference or supervision from respondent company and relied on his own resources to perform his
functions. Respondent company did not prescribe the manner of selling the merchandise; he was left alone to adopt any
style or strategy to entice his customers. While it is true that he occasionally reported to the Manila office to attend
conferences on marketing strategies, it was intended not to control the manner and means to be used in reaching the
desired end, but to serve as a guide and to upgrade his skills for a more efficient marketing performance. As correctly
observed by the appellate court, reports on sales, collection, competitors, market strategies, price listings and new offers
relayed by petitioner during his conferences to Manila do not indicate that he was under the control of respondent.
[14]
Moreover, petitioner was free to offer his services to other companies engaged in similar or related marketing activities
as evidenced by the certifications issued by various customers. [15]
In Encyclopedia Britannica (Philippines), Inc. v. NLRC,[16] we reiterated the rule that there could be no employeremployee relationship where the element of control is absent. Where a person who works for another does so more or
less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to
the result of his efforts and not the amount thereof, no relationship of employer-employee exists.
We do not agree with petitioners contention that Article 280 [17] is a crucial factor in determining the existence of an
employment relationship. It merely distinguishes between two kinds of employees, i.e., regular employees and casual
employees, for purposes of determining their rights to certain benefits, such as to join or form a union, or to security of
tenure. Article 280 does not apply where the existence of an employment relationship is in dispute. [18]
Neither can we subscribe to petitioners misplaced reliance on the case of Songco v. NLRC.[19] While in that case the
term commission under Article 96 of the Labor Code was construed as being included in the definition of the term wage
available to employees, there is no categorical pronouncement that the payment of compensation on commission basis is
conclusive proof of the existence of an employer-employee relationship. After all, commission, as a form of remuneration,
may be availed of by both an employee or a non-employee.
Petitioner decried the alleged intimidation and trickery employed by respondents to obtain from him a Promissory
Note and to issue forty-seven checks as security for the bad accounts incurred by five customers.
While petitioner may have been coerced into executing force to issue the said documents, it may equally be true that
petitioner did so in recognition of a valid financial obligation. He who claims that force or intimidation was employed upon
him lies the onus probandi. He who asserts must prove. It is therefore incumbent upon petitioner to overcome the
disputable presumption that private transactions have been prosecuted fairly and regularly, and that there is sufficient
consideration for every contract.[20] A fortiori, it is difficult to imagine that petitioner, a salesman of long standing, would
accede without raising a protest to the patently capricious and oppressive demand by respondent of requiring him to
assume bad accounts which, as he contended, he had not incurred. This lends credence to the respondents assertion
that petitioner procured the goods from the said company on credit, consignment or installment basis and then sold the
same to various customers. In the scheme of things, petitioner, having directly contracted with the respondent company,
becomes responsible for the amount of merchandise he took from the respondent, and in turn, the customer/s would be
liable for their respective accounts to the seller, i.e., the petitioner, with whom they contracted the sale.
All told, we sustain the factual and legal findings of the appellate court and accordingly, find no cogent reason to
overturn the same.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated March 7, 2003 in CA-G.R. SP No.
73102, which denied the petition of Empermaco B. Abante, isAFFIRMED in toto.
SO ORDERED.
FIRST DIVISION [G.R. No. 145443. March 18, 2005]

RAQUEL P. CONSULTA, petitioner, vs. COURT OF APPEALS, PAMANA PHILIPPINES, INC., RAZUL Z. REQUESTO,
and ALETA TOLENTINO,respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] assailing the Decision of 28 April 2000 and Resolution of 9 October 2000 promulgated
by the Court of Appeals (appellate court) [2] in CA-G.R. SP No. 50462. The appellate court reversed the Resolution of the
National Labor Relations Commission (NLRC) which in turn affirmed the Labor Arbiters Decision.
The Antecedent Facts
Pamana Philippines, Inc. (Pamana) is engaged in health care business. Raquel P. Consulta (Consulta) was a
Managing Associate of Pamana. Consultas appointment dated 1 December 1987 states:
We are pleased to formally confirm your appointment and confer upon you the authority as MANAGING ASSOCIATE (MA)
effective on December 1, 1987 up to January 2, 1988. Your area of operation shall be within Metro Manila.
In this capacity, your principal responsibility is to organize, develop, manage, and maintain a sales division and a full complement of
agencies and Health Consultants (HealthCons) and to submit such number of enrollments and revenue attainments as may be required
of your position in accordance with pertinent Company policies and guidelines. In pursuit of this objective, you are hereby tasked with
the responsibilities of recruiting, training and directing your Supervising Associates (SAs) and the Health Consultants under their
respective agencies, for the purpose of promoting our corporate Love Mission.
In the performance of such duties, you are expected to uphold and promote the Companys interests and good image and to abide by its
principles and established norms of conduct necessary and appropriate in the discharge of your functions. The authority as MA
likewise vests upon you command responsibility for the actions of your SAs and HealthCons; the Company therefore reserves the
right to debit your account for any accountabilities/financial obligations arising therefrom.
By your acceptance of this appointment, it is understood that you must represent the Company on an exclusive basis, and must not
engage directly or indirectly in activities, nor become affiliated in official or unofficial capacity with companies or organizations
which compete or have the same business as Pamana. It is further understood that his [sic] self-inhibition shall be effective for a period
of one year from date of official termination with the Company arising from any cause whatsoever.
In consideration of your undertaking the assignment and the accompanying duties and responsibilities, you shall be entitled to
compensation computed as follows:
On Initial Membership Fee Entrance Fee 5%
Medical Fee 6%
On Subsequent Membership Fee 6%
You are likewise entitled to participate in sales contests and such other incentives that may be implemented by the Company.
This appointment is on a non-employer-employee relationship basis, and shall be in accordance with the Company Guidelines on
Appointment, Reclassification and Transfer of Sales Associates.[3]
Sometime in 1987, Consulta negotiated with the Federation of Filipino Civilian Employees Association (FFCEA)
working at the United States Subic Naval Base for a Health Care Plan for the FFCEA members. Pamana issued Consulta
a Certification[4] dated 23 November 1987, as follows:
This certifies that the Emerald Group under Ms. Raquel P. Consulta, as Managing Consultant, is duly authorized to negotiate for and
in behalf of PAMANA with the Federation of Filipino Civilian Employees Association covering all U.S. facilities in the Philippines,
the coverage of FFCEA members under the Pamana Golden Care Health Plans.
Upon such negotiation and eventual execution of the contract agreements, entitlements of all benefits due the Emerald Group in its
[sic] entirely including its [sic] Supervising Consultants and Health Consultants, by of commissions, over-rides and other package of
benefits is hereby affirmed, obligated and confirmed as long as the contracts negotiated and executed are in full force and effect,
including any and all renewals made. And provided further that the herein authorized consultants remain in active status with the
Pamana Golden Care sales group.[5]
On 4 March 1988, Pamana and the U.S. Naval Supply Depot signed the FFCEA account. Consulta, claiming that
Pamana did not pay her commission for the FFCEA account, filed a complaint for unpaid wages or commission against
Pamana, its President Razul Z. Requesto (Requesto), and its Executive Vice-President Aleta Tolentino (Tolentino).
The Rulings of the Labor Arbiter and the NLRC
In a Decision promulgated on 23 June 1993, Labor Arbiter Alex Arcadio Lopez ruled, as follows:
ACCORDINGLY, respondent is hereby ordered to pay complainant her unpaid commission to be computed as against actual
transactions between respondent PAMANA and the contracting Department of U.S. Naval Supply Depot upon presentation of
pertinent document.
Respondent is further ordered to pay ten (10%) percent attorneys fees.
SO ORDERED.[6]
Pamana, Requesto and Tolentino (Pamana et al.) appealed the Decision of the Labor Arbiter.
In a Resolution[7] promulgated on 22 July 1994, the NLRC dismissed the appeal and affirmed the Decision of the
Labor Arbiter. In its Order promulgated on 3 October 1994, the NLRC denied the motion for reconsideration of Pamana et
al.
Pamana et al. filed a petition for certiorari before this Court. In compliance with this Courts resolution dated 6
February 1995, the Office of the Solicitor General submitted a Manifestation in Lieu of Comment praying to grant the
petition on the ground that Consulta was not an employee of Pamana. On 23 November 1998, this Court referred the
case to the appellate court pursuant to St. Martin Funeral Home v. NLRC.[8]
The Decision of the Appellate Court
In its Decision promulgated on 28 April 2000, the appellate court reversed the NLRC Decision. The appellate court
ruled that Consulta was a commission agent, not an employee of Pamana. The appellate court also ruled that Consulta
should have litigated her claim for unpaid commission in an ordinary civil action.
Hence, Consultas recourse to this Court.
The Issues
The issues are:
1. Whether Consulta was an employee of Pamana.
2. Whether the Labor Arbiter had jurisdiction over Consultas claim for unpaid commission.
The Ruling of the Court
We affirm the Decision of the appellate court. Consulta was an independent agent and not an employee of Pamana.
The Four-Fold Test
In Viaa v. Al-Lagadan,[9] the Court first laid down the four-fold test to determine the existence of an employeremployee relationship. The four elements of an employer-employee relationship, which have since been adopted in
subsequent jurisprudence,[10] are (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the
power to control. The power to control is the most important of the four elements.
In Insular Life Assurance Co., Ltd. v. NLRC,[11] the Court explained the scope of the power to control, thus:
x x x It should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of the
party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between
them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee
and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that gives untrammelled
freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired
result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee
relationship unlike the second, which address both the result and the means used to achieve it.
In the present case, the power to control is missing. Pamana tasked Consulta to organize, develop, manage, and
maintain a sales division, submit a number of enrollments and revenue attainments in accordance with company policies
and guidelines, and to recruit, train and direct her Supervising Associates and Health Consultants. [12] However, the manner
in which Consulta was to pursue these activities was not subject to the control of Pamana. Consulta failed to show that
she had to report for work at definite hours. The amount of time she devoted to soliciting clients was left entirely to her
discretion. The means and methods of recruiting and training her sales associates, as well as the development,
management and maintenance of her sales division, were left to her sound judgment.
Consulta claims that the documents she submitted show that Pamana had control on the conduct of her work and the
means and methods to accomplish the work. However, the documents only prove the absence of the power to control.
The Minutes of the meeting on 31 May 1988 of the Managing Associates with Fely Whitfield, Vice-President for Sales of
Pamana, reflect the following:
At this point Mrs. Whitfield gave some pointers on recruitment and selling techniques and reminded the group that the success of
an agency is still people. The more recruits you have the better is your chance to achieve your quota.
She also announced June be made a recruitment month, and told the MAs to remind their associates that if you cannot sell to a
prospect then recruit him or her.
She also discussed extensively the survey method of selling and recruitment and that the sales associates should be more aggressive in
their day to day sales activity. She reminded the MAs to fill up their recruitment requirements to be able to participate in the
monthly and quarterly contest.
xxx
4. Recruitment Campaign
In connection with the Recruitment Campaign for June, Mr. R. Canon[13] requested for Management support. He suggested that a
recruitment Advertisement be placed in a leading Metropolitan daily Newspaper. The cost of which was unanimously suggested by
MAs that Management should share at least 50%.
5. MAs agreed to pay in advance their share for the salary of the MAs Secretary.[14] (Emphasis supplied)
The Minutes of the 7 June 1988 meeting reflect the following:
III. PRODUCTION & RECRUITMENT INCENTIVES
To help the MAs in their recruitment drive Mrs. Whitfield suggested some incentives to be undertaken by the MAs like (1) cash
incentives for associates that bring in a recruit, (2) cash incentives based on production brought in by these new recruits.
She said that MAs, as businessm[e]n should invest time, effort & money to their work, because it will redown [sic] to their own good
anyway, that the success of their agency should not depend solely on what management could give as incentives but also on incentives
of MAs within their agencies. It should be a concerted effort.
After a thorough discussion on the pros & cons of the suggestions it was agreed that a P10.00 per recruit be given to the associate that
will recruit and an additional cash prize based on production of these new recruits.[15]
Clearly, the Managing Associates only received suggestions from Pamana on how to go about their recruitment and
sales activities. They could adopt the suggestions but the suggestions were not binding on them. They could adopt other
methods that they deemed more effective.
Further, the Managing Associates had to ask the Management of Pamana to shoulder half of the advertisement cost
for their recruitment campaign. They shelled out their own resources to bolster their recruitment. They shared in the
payment of the salaries of their secretaries. They gave cash incentives to their sales associates from their own pocket.
These circumstances show that the Managing Associates were independent contractors, not employees, of Pamana.
Finally, Pamana paid Consulta not for labor she performed but only for the results of her labor. [16] Without results,
Consultas labor was her own burden and loss. Her right to compensation, or to commission, depended on the tangible
results of her work[17] - whether she brought in paying recruits. Consultas appointment paper provides:
In consideration of your undertaking the assignment and the accompanying duties and responsibilities, you shall be entitled to
compensation computed as follows:
On Initial Membership Fee Entrance Fee 5%
Medical Fee 6%
On Subsequent Membership Fee 6%
You are likewise entitled to participation in sales contests and such other incentives that may be implemented by the Company.[18]
The Guidelines on Appointment of Associates show that a Managing Associate received the following commissions
and bonuses:
3. Compensation Package of Regular MAs
Regular MAs shall be entitled to the following compensation and benefits:
3.1 Compensation
a) Personal Production
Individual/Family Institutional Acct.
commission 30% 30%
bonus 40% b) Group Production
overriding commission 6% 6%
bonus 5% 3.2 Benefits
Participation in all sales contests corresponding to the MA position plus any such other benefits as may be provided for the
MA on regular status.[19]
Aside from commissions, bonuses and other benefits that depended solely on actual sales, Pamana did not pay
Consulta any compensation for managing her sales division, or for recruiting and training her sales consultants. As a
Managing Associate, she was only entitled to commissions, bonuses and other benefits, which depended solely on her
sales and on the sales of her group.
The Exclusivity Provision
Consultas appointment had an exclusivity provision. The appointment provided that Consulta must represent
Pamana on an exclusive basis. She must not engage directly or indirectly in activities of other companies that compete
with the business of Pamana. However, the fact that the appointment required Consulta to solicit business exclusively for
Pamana did not mean that Pamana exercised control over the means and methods of Consultas work as the term control
is understood in labor jurisprudence.[20] Neither did it make Consulta an employee of Pamana. Pamana did not prohibit
Consulta from engaging in any other business, or from being connected with any other company, for as long as the
business or company did not compete with Pamanas business.
The prohibition applied for one year after the termination of the contract with Pamana. In one of their meetings, one
of the Managing Associates reported that he was transferring his sales force and account from another company to
Pamana.[21] The exclusivity provision was a reasonable restriction designed to prevent similar acts prejudicial to Pamanas
business interest. Article 1306 of the Civil Code provides that [t]he contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
Jurisdiction over Claim for Unpaid Commission
There being no employer-employee relationship between Pamana and Consulta, the Labor Arbiter and the NLRC
had no jurisdiction to entertain and rule on Consultas money claim.
Article 217 of the Labor Code provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by
the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring
the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
Consulta filed her action under Article 217(a)(6) of the Labor Code. However, since there was no employer-employee
relationship between Pamana and Consulta, the Labor Arbiter should have dismissed Consultas claim for unpaid
commission. Consultas remedy is to file an ordinary civil action to litigate her claim.
WHEREFORE, the petition is DISMISSED and the Decision of the Court of Appeals in CA-G.R. SP No. 50462 is
AFFIRMED in toto.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.
COCA COLA BOTTLERS (PHILS.), G.R. No. 146881

INC./ERIC MONTINOLA, Manager,
Petitioners, Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
versus - CORONA,
AZCUNA, and
GARCIA, JJ.
DR. DEAN N. CLIMACO, Promulgated:
Respondent.
February 5, 2007
x ---------------------------------------------------------------------------------------- x
DECISION
AZCUNA, J.:
This is a petition for review on certiorari of the Decision of the Court of Appeals [1] promulgated on July 7, 2000, and its
Resolution promulgated on January 30, 2001, denying petitioners motion for reconsideration. The Court of Appeals ruled that an
employer-employee relationship exists between respondent Dr. Dean N. Climaco and petitioner Coca-Cola Bottlers Phils., Inc. (CocaCola), and that respondent was illegally dismissed.
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of
a Retainer Agreement that stated:
WHEREAS, the COMPANY desires to engage on a retainer basis the services of a physician and the said
DOCTOR is accepting such engagement upon terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreement hereinafter contained, the
parties agree as follows:
1.
This Agreement shall only be for a period of one (1) year beginning January 1, 1988 up to December
31, 1988. The said term notwithstanding, either party may terminate the contract upon giving a thirty (30)day written notice to the other.
2.
The compensation to be paid by the company for the services of the DOCTOR is hereby fixed at
PESOS: Three Thousand Eight Hundred (P3,800.00) per month. The DOCTOR may charge professional
fee for hospital services rendered in line with his specialization. All payments in connection with the
Retainer Agreement shall be subject to a withholding tax of ten percent (10%) to be withheld by the
COMPANY under the Expanded Withholding Tax System. In the event the withholding tax rate shall be
increased or decreased by appropriate laws, then the rate herein stipulated shall accordingly be increased or
decreased pursuant to such laws.
3.
That in consideration of the above mentioned retainers fee, the DOCTOR agrees to perform the duties
and obligations enumerated in the COMPREHENSIVE MEDICAL PLAN, hereto attached as Annex A and
made an integral part of this Retainer Agreement.
4.
That the applicable provisions in the Occupational Safety and Health Standards, Ministry of Labor and
Employment shall be followed.
5.
That the DOCTOR shall be directly responsible to the employee concerned and their dependents for
any injury inflicted on, harm done against or damage caused upon the employee of the COMPANY or their
dependents during the course of his examination, treatment or consultation, if such injury, harm or damage
was committed through professional negligence or incompetence or due to the other valid causes for action.
6.
That the DOCTOR shall observe clinic hours at the COMPANYS premises from Monday to Saturday
of a minimum of two (2) hours each day or a maximum of TWO (2) hours each day or treatment
from 7:30 a.m. to 8:30 a.m. and 3:00 p.m. to 4:00 p.m., respectively unless such schedule is otherwise
changed by the COMPANY as [the] situation so warrants, subject to the Labor Code provisions on
Occupational Safety and Health Standards as the COMPANY may determine. It is understood that the
DOCTOR shall stay at least two (2) hours a day in the COMPANY clinic and that such two (2) hours be
devoted to the workshift with the most number of employees. It is further understood that the DOCTOR
shall be on call at all times during the other workshifts to attend to emergency case[s];
7.
That no employee-employer relationship shall exist between the COMPANY and the DOCTOR whilst
this contract is in effect, and in case of its termination, the DOCTOR shall be entitled only to such retainer
fee as may be due him at the time of termination.[2]
The Comprehensive Medical Plan,[3] which contains the duties and responsibilities of respondent, adverted to in the Retainer
Agreement, provided:
A.
OBJECTIVE
These objectives have been set to give full consideration to [the] employees and dependents health:
1. Prompt and adequate treatment of occupational and non-occupational injuries and diseases.
2. To protect employees from any occupational health hazard by evaluating health factors related to
working conditions.
3. To encourage employees [to] maintain good personal health by setting up employee orientation and
education on health, hygiene and sanitation, nutrition, physical fitness, first aid training, accident
prevention and personnel safety.
4. To evaluate other matters relating to health such as absenteeism, leaves and termination.
5. To give family planning motivations.

B.
COVERAGE
1. All employees and their dependents are embraced by this program.
2. The health program shall cover pre-employment and annual p.e., hygiene and sanitation, immunizations,
family planning, physical fitness and athletic programs and other activities such as group health
education program, safety and first aid classes, organization of health and safety committees.
3. Periodically, this program will be reviewed and adjusted based on employees needs.
C.
ACTIVITIES
1. Annual Physical Examination.
2. Consultations, diagnosis and treatment of occupational and non-occupational illnesses and injuries.
3. Immunizations necessary for job conditions.
4. Periodic inspections for food services and rest rooms.
5. Conduct health education programs and present education materials.
6. Coordinate with Safety Committee in developing specific studies and program to minimize
environmental health hazards.
7. Give family planning motivations.
8. Coordinate with Personnel Department regarding physical fitness and athletic programs.
9. Visiting and follow-up treatment of Company employees and their dependents confined in the hospital.
The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired on December 31,
1993. Despite the non-renewal of the Retainer Agreement, respondent continued to perform his functions as company doctor to CocaCola until he received a letter [4] dated March 9, 1995 from petitioner company concluding their retainership agreement effective 30
days from receipt thereof.
It is noted that as early as September 1992, petitioner was already making inquiries regarding his status with petitioner
company. First, he wrote a letter addressed to Dr. Willie Sy, the Acting President and Chairperson of the Committee on Membership,
Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter[5] to the Personnel Officer of Coca-Cola Bottlers
Phils., Bacolod City, stating that respondent should be considered as a regular part-time physician, having served the company
continuously for four (4) years. He likewise stated that respondent must receive all the benefits and privileges of an employee under
Article 157 (b)[6] of the Labor Code.
Petitioner company, however, did not take any action. Hence, respondent made another inquiry directed to the Assistant
Regional Director, Bacolod City District Office of the Department of Labor and Employment (DOLE), who referred the inquiry to the
Legal Service of the DOLE, Manila. In his letter[7] dated May 18, 1993, Director Dennis P. Ancheta, Legal Service, DOLE, stated that
he believed that an employer-employee relationship existed between petitioner and respondent based on the Retainer Agreement and
the Comprehensive Medical Plan, and the application of the four-fold test. However, Director Ancheta emphasized that the existence
of employer-employee relationship is a question of fact. Hence, termination disputes or money claims arising from employeremployee relations exceeding P5,000 may be filed with the National Labor Relations Commission (NLRC). He stated that their
opinion is strictly advisory.
An inquiry was likewise addressed to the Social Security System (SSS). Thereafter, Mr. Romeo R. Tupas, OIC-FID of SSSBacolod City, wrote a letter[8] to the Personnel Officer of Coca-Cola Bottlers Phils., Inc. informing the latter that the legal staff of his
office was of the opinion that the services of respondent partake of the nature of work of a regular company doctor and that he was,
therefore, subject to social security coverage.
Respondent inquired from the management of petitioner company whether it was agreeable to recognizing him as a regular
employee. The management refused to do so.
On February 24, 1994, respondent filed a Complaint [9] before the NLRC, Bacolod City, seeking recognition as a regular
employee of petitioner company and prayed for the payment of all benefits of a regular employee, including 13 th Month Pay, Cost of
Living Allowance, Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus. The case was docketed as RAB Case No. 06-0210138-94.
While the complaint was pending before the Labor Arbiter, respondent received a letter dated March 9, 1995 from petitioner
company concluding their retainership agreement effective thirty (30) days from receipt thereof. This prompted respondent to file a
complaint for illegal dismissal against petitioner company with the NLRC, BacolodCity. The case was docketed as RAB Case No. 0604-10177-95.
In a Decision[10] dated November 28, 1996, Labor Arbiter Jesus N. Rodriguez, Jr. found that petitioner company lacked the
power of control over respondents performance of his duties, and recognized as valid the Retainer Agreement between the
parties. Thus, the Labor Arbiter dismissed respondents complaint in the first case, RAB Case No. 06-02-10138-94. The dispositive
portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered dismissing the instant complaint seeking
recognition as a regular employee.
SO ORDERED.[11]
In a Decision[12] dated February 24, 1997, Labor Arbiter Benjamin Pelaez dismissed the case for illegal dismissal (RAB Case
No. 06-04-10177-95) in view of the previous finding of Labor Arbiter Jesus N. Rodriguez, Jr. in RAB Case No. 06-02-10138-94
that complainant therein, Dr. Dean Climaco, is not an employee of Coca-Cola Bottlers Phils., Inc.
Respondent appealed both decisions to the NLRC, Fourth Division, Cebu City.
In a Decision[13] promulgated on November 28, 1997, the NLRC dismissed the appeal in both cases for lack of merit. It
declared that no employer-employee relationship existed between petitioner company and respondent based on the provisions of the
Retainer Agreement which contract governed respondents employment.
Respondents motion for reconsideration was denied by the NLRC in a Resolution[14] promulgated on August 7, 1998.
Respondent filed a petition for review with the Court of Appeals.
In a Decision promulgated on July 7, 2000, the Court of Appeals ruled that an employer-employee relationship existed
between petitioner company and respondent after applying the four-fold test: (1) the power to hire the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the employers power to control the employee with respect to the means and methods by
which the work is to be accomplished.
The Court of Appeals held:
The Retainer Agreement executed by and between the parties, when read together with the Comprehensive
Medical Plan which was made an integral part of the retainer agreements, coupled with the actual services rendered
by the petitioner, would show that all the elements of the above test are present.
First, the agreements provide that the COMPANY desires to engage on a retainer basis the services of a
physician and the said DOCTOR is accepting such engagement x x x (Rollo, page 25). This clearly shows that
Coca-Cola exercised its power to hire the services of petitioner.
Secondly, paragraph (2) of the agreements showed that petitioner would be entitled to a final compensation
of Three Thousand Eight Hundred Pesos per month, which amount was later raised to Seven Thousand Five
Hundred on the latest contract. This would represent the element of payment of wages.
Thirdly, it was provided in paragraph (1) of the agreements that the same shall be valid for a period of one
year. The said term notwithstanding, either party may terminate the contract upon giving a thirty (30) day written
notice to the other. (Rollo, page 25). This would show that Coca-Cola had the power of dismissing the petitioner, as
it later on did, and this could be done for no particular reason, the sole requirement being the formers compliance
with the 30-day notice requirement.
Lastly, paragraphs (3) and (6) of the agreements reveal that Coca-Cola exercised the most important
element of all, that is, control, over the conduct of petitioner in the latters performance of his duties as a doctor for
the company.
It was stated in paragraph (3) that the doctor agrees to perform the duties and obligations enumerated in the
Comprehensive Medical Plan referred to above. In paragraph (6), the fixed and definite hours during which the
petitioner must render service to the company is laid down.
We say that there exists Coca-Colas power to control petitioner because the particular objectives and
activities to be observed and accomplished by the latter are fixed and set under the Comprehensive Medical Plan
which was made an integral part of the retainer agreement. Moreover, the times for accomplishing these objectives
and activities are likewise controlled and determined by the company. Petitioner is subject to definite hours of work,
and due to this, he performs his duties to Coca-Cola not at his own pleasure but according to the schedule dictated
by the company.
In addition, petitioner was designated by Coca-Cola to be a member of its Bacolod Plants Safety
Committee. The minutes of the meeting of the said committee dated February 16, 1994included the name of
petitioner, as plant physician, as among those comprising the committee.
It was averred by Coca-Cola in its comment that they exercised no control over petitioner for the reason
that the latter was not directed as to the procedure and manner of performing his assigned tasks. It went as far as
saying that petitioner was not told how to immunize, inject, treat or diagnose the employees of the respondent
(Rollo, page 228). We believe that if the control test would be interpreted this strictly, it would result in an absurd
and ridiculous situation wherein we could declare that an entity exercises control over anothers activities only in
instances where the latter is directed by the former on each and every stage of performance of the particular
activity. Anything less than that would be tantamount to no control at all.
To our minds, it is sufficient if the task or activity, as well as the means of accomplishing it, is dictated, as
in this case where the objectives and activities were laid out, and the specific time for performing them was fixed by
the controlling party.[15]
Moreover, the Court of Appeals declared that respondent should be classified as a regular employee having rendered six years
of service as plant physician by virtue of several renewed retainer agreements. It underscored the provision in Article 280 [16] of the
Labor Code stating that any employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which he is employed, and his employment shall continue while
such activity exists. Further, it held that the termination of respondents services without any just or authorized cause constituted illegal
dismissal.
In addition, the Court of Appeals found that respondents dismissal was an act oppressive to labor and was effected in a
wanton, oppressive or malevolent manner which entitled respondent to moral and exemplary damages.
The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing, the Decision of the National Labor Relations Commission
dated November 28, 1997 and its Resolution dated August 7, 1998 are found to have been issued with grave abuse
of discretion in applying the law to the established facts, and are hereby REVERSED and SET ASIDE, and private
respondent Coca-Cola Bottlers, Phils.. Inc. is hereby ordered to:
1.
Reinstate the petitioner with full backwages without loss of seniority rights from the time his
compensation was withheld up to the time he is actually reinstated; however, if reinstatement is no longer
possible, to pay the petitioner separation pay equivalent to one (1) months salary for every year of service
rendered, computed at the rate of his salary at the time he was dismissed, plus backwages.
2.
Pay petitioner moral damages in the amount of P50,000.00.
3.
Pay petitioner exemplary damages in the amount of P50,000.00.
4.
Give to petitioner all other benefits to which a regular employee of Coca-Cola is entitled from the time
petitioner became a regular employee (one year from effectivity date of employment) until the time of
actual payment.
SO ORDERED.[17]
Petitioner company filed a motion for reconsideration of the Decision of the Court of Appeals.
In a Resolution promulgated on January 30, 2001, the Court of Appeals stated that petitioner company noted that its Decision
failed to mention whether respondent was a full-time or part-time regular employee. It also questioned how the benefits under their
Collective Bargaining Agreement which the Court awarded to respondent could be given to him considering that such benefits were
given only to regular employees who render a full days work of not less that eight hours. It was admitted that respondent is only
required to work for two hours per day.
The Court of Appeals clarified that respondent was a regular part-time employee and should be accorded all the proportionate
benefits due to this category of employees of [petitioner] Corporation under the CBA. It sustained its decision on all other matters
sought to be reconsidered.
Hence, this petition filed by Coca-Cola Bottlers Phils., Inc.

The issues are:
1.
THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR
ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, CONTRARY TO THE
DECISIONS OF THE HONORABLE SUPREME COURT ON THE MATTER.
2.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND HOLDING INSTEAD
THAT THE WORK OF A PHYSICIAN IS NECESSARY AND DESIRABLE TO THE BUSINESS OF
SOFTDRINKS MANUFACTURING, CONTRARY TO THE RULINGS OF THE SUPREME COURT IN
ANALOGOUS CASES.
3.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND HOLDING INSTEAD
THAT THE PETITIONERS EXERCISED CONTROL OVER THE WORK OF THE RESPONDENT.
4.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND FINDING THAT
THERE IS EMPLOYER-EMPLOYEE RELATIONSHIP PURSUANT TO ARTICLE 280 OF THE
LABOR CODE.
5.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND FINDING THAT
THERE EXISTED ILLEGAL DISMISSAL WHEN THE EMPLOYENT OF THE RESPONDENT WAS
TERMINATED WITHOUT JUST CAUSE.
6.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND FINDING THAT THE
RESPONDENT IS A REGULAR PART TIME EMPLOYEE WHO IS ENTITLED TO PROPORTIONATE
BENEFITS AS A REGULAR PART TIME EMPLOYEE ACCORDING TO THE PETITIONERS CBA.
7.

ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND FINDING THAT THE
RESPONDENT IS ENTITLED TO MORAL AND EXEMPLARY DAMAGES.
The main issue in this case is whether or not there exists an employer-employee relationship between the parties. The
resolution of the main issue will determine whether the termination of respondents employment is illegal.
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test:
(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control
the employees conduct, or the so-called control test, considered to be the most important element. [18]
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no
employer-employee relationship exists between the parties. The Labor Arbiter and the NLRC correctly found that petitioner company
lacked the power of control over the performance by respondent of his duties. The Labor Arbiter reasoned that the Comprehensive
Medical Plan, which contains the respondents objectives, duties and obligations, does not tell respondent how to conduct his physical
examination, how to immunize, or how to diagnose and treat his patients, employees of [petitioner] company, in each case. He likened
this case to that of Neri v. National Labor Relations Commission,[19] which held:
In the case of petitioner Neri, it is admitted that FEBTC issued a job description which detailed her
functions as a radio/telex operator. However, a cursory reading of the job description shows that what was sought to
be controlled by FEBTC was actually the end result of the task, e.g., that the daily incoming and outgoing
telegraphic transfer of funds received and relayed by her, respectively, tallies with that of the register. The guidelines
were laid down merely to ensure that the desired end result was achieved. It did not, however, tell Neri how the
radio/telex machine should be operated.
In effect, the Labor Arbiter held that petitioner company, through the Comprehensive Medical Plan, provided guidelines
merely to ensure that the end result was achieved, but did not control the means and methods by which respondent performed his
assigned tasks.
The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the company lacks the power of
control that the contract provides that respondent shall be directly responsible to the employee concerned and their dependents for any
injury, harm or damage caused through professional negligence, incompetence or other valid causes of action.
The Labor Arbiter also correctly found that the provision in the Retainer Agreement that respondent was on call during
emergency cases did not make him a regular employee. He explained, thus:
Likewise, the allegation of complainant that since he is on call at anytime of the day and night makes him a
regular employee is off-tangent. Complainant does not dispute the fact that outside of the two (2) hours that he is
required to be at respondent companys premises, he is not at all further required to just sit around in the premises
and wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. In
fact, complainant maintains his own private clinic attending to his private practice in the city, where he services his
patients, bills them accordingly -- and if it is an employee of respondent company who is attended to by him for
special treatment that needs hospitalization or operation, this is subject to a special billing. More often than not, an
employee is required to stay in the employers workplace or proximately close thereto that he cannot utilize his time
effectively and gainfully for his own purpose. Such is not the prevailing situation here.
In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount to
such control, but are necessary incidents to the Retainership Agreement.
The Court also notes that the Retainership Agreement granted to both parties the power to terminate their relationship upon
giving a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termination.
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of respondent as a
retained physician of petitioner company and upholds the validity of the Retainership Agreement which clearly stated that no
employer-employee relationship existed between the parties. The Agreement also stated that it was only for a period of 1 year
beginning January 1, 1988 to December 31, 1998, but it was renewed on a yearly basis.
Considering that there is no employer-employee relationship between the parties, the termination of the Retainership
Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of
respondent. Consequently, there is no basis for the moral and exemplary damages granted by the Court of Appeals to respondent due
to his alleged illegal dismissal.
WHEREFORE,
the
petition
is GRANTED and
the
Decision
and
Resolution
of
the
Court
of
Appeals
are REVERSED and SET ASIDE. The Decision and Resolution dated November 28, 1997 and August 7, 1998, respectively, of the
National Labor Relations Commission are REINSTATED.
No costs.
SO ORDERED.
THIRD DIVISION
BIG AA MANUFACTURER,
Petitioner,
G.R. No. 160854

Present:
- versus -
QUISUMBING, J., Chairperson,

CARPIO,
CARPIO MORALES, and
TINGA, JJ.
EUTIQUIO ANTONIO,
JAY ANTONIO,
FELICISIMO ANTONIO, and LEONARDO
ANTONIO, SR.,
Respondents.
Promulgated:
March 3, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J:
For review on certiorari is the Decision [1] dated April 11, 2003 of the Court of Appeals in CA-G.R. SP No. 70363 affirming the
decision[2] of the National Labor Relations Commission (NLRC). The NLRC had modified the Labor Arbiters decision [3] ordering
petitioner to reinstate respondents to their former positions or to pay them separation pay in case reinstatement was no longer possible,
with full backwages in either case. Also assailed is the appellate courts Resolution[4] dated November 17, 2003, denying the motion for
reconsideration.
The instant petition arose from the following factual antecedents:
Petitioner is a sole proprietorship registered in the name of its proprietor, Enrico E. Alejo,[5] with office address at 311
Barrio Santol, Balagtas, Bulacan.
On January 13, 2000, herein respondents Eutiquio Antonio, [6] Jay Antonio, Felicisimo Antonio, Leonardo Antonio, Sr. and Roberto
Fabian filed a complaint for illegal lay-off and illegal deductions before the NLRCs Regional Arbitration Branch No. III. They
claimed that they were dismissed on January 11, 2000 and sought separation pay from petitioner.
When amicable settlement during the mandatory conference failed, the parties were required to file their position papers. The Labor
Arbiter did not dismiss the complaint with respect to Roberto Fabian, despite his failure to file a position paper. Neither did the Labor
Arbiters decision concern Roberto Fabian. Hence, this petition shall apply only to Eutiquio, Jay, Felicisimo, and Leonardo, Sr., all
surnamed Antonio, the respondents herein.
In respondents position paper,[7] they alleged that as regular employees, they worked from 8:00 a.m. to 5:00 p.m. at
petitioners premises using petitioners tools and equipment and they received P250 per day. Eutiquio was employed as carpenterforeman from 1991-1999; Jay as carpenter from 1993-1999; Felicisimo as carpenter from 1994-1999; and Leonardo, Sr. also as
carpenter from 1997-1999. According to respondents, they were dismissed without just cause and due process; hence, their prayer for
reinstatement and full backwages. They also impleaded one Hermie Alejo, a relative of the petitioners owner, as co-respondent in their
complaint.
On the other hand, in its position paper, petitioner Big AA Manufacturer, [8] affirmed it is a sole proprietorship registered in the
name of Enrico Alejo and engaged in manufacturing office furniture, but it denied that respondents were its regular
employees. Instead, petitioner claimed that Eutiquio Antonio was one of its independent contractors who used the services of the other
respondents. According to petitioner, its independent contractors were paid by results and were responsible for the salaries of their
own workers. Allegedly, there was no employer-employee relationship between petitioner and respondents. However, petitioner stated
it allowed respondents to use its facilities to meet job orders.
Petitioner also denied that respondents were laid-off by Big AA Manufacturer, since they were project employees only. It
added that since Eutiquio Antonio had refused a job order of office tables, their contractual relationship ended. Petitioner surmised that
Eutiquio resented the January 10, 2000 Implementing Guidelines it issued to improve efficiency and performance.
In their Reply[9] to petitioners position paper, respondents stated that Enrico Alejo should be impleaded as a proper or
indispensable party as sole proprietor of Big AA.They also pointed out that petitioners payroll shows that Eutiquio Antonio was
assigned in its carpentry section and obtained vales (advances on salaries) on various dates. The Implementing Guidelines and written
warnings addressed to Eutiquio Antonio also prove that respondents were under petitioners control and supervision.
In its own Reply[10] to respondents position paper, petitioner labeled as fabricated the respondents allegations. It presented
additional evidence such as the bio-data of Eutiquio and Jay to disprove their claim that they worked with petitioner from 1991 and
1993, respectively. It also said that the claim that respondents received P250 per day based on its payroll was speculative. While
petitioner admitted that respondents were issued identification cards to gain access to company premises to obtain raw materials, it
denied that respondents worked from 8:00 a.m. to 5:00 p.m. It stated that respondents do not even have daily time records.
On June 1, 2000, the Labor Arbiter rendered a decision ordering BIG-AA MANUFACTURERS II, ET AL. to pay
respondents P136,500 as separation pay, and P121,160 as backwages. It was unclear concerning Enrico Alejos liability as the sole
proprietor of Big AA. The Labor Arbiter ruled that respondents were regular employees because their work as carpenters was
necessary and desirable in petitioners business. Since Eutiquio worked in petitioners premises and was without substantial capital or
investment in the form of tools, equipment, machinery or work premises, the Labor Arbiter held that Eutiquio was not an independent
contractor. Noting the absence of contracts providing the duration of respondents employment and of reports of project completion to
the Department of Labor and Employment (DOLE), the Labor Arbiter also rejected petitioners allegation that respondents were project
employees. The Labor Arbiter further held that respondents were constructively dismissed when the Implementing Guidelines changed
their status from regular employees to project employees.
Both parties appealed to the NLRC. Petitioner claimed that the Labor Arbiter committed errors in his findings of facts. It also
prayed that (1) Eutiquio Antonio be declared a labor-only contractor; (2) Hermie Alejo be dropped from the case; (3) respondents be
ordered to report back to work; and (4) the respondents claim for separation pay and backwages be dismissed.
Respondents, on the other hand, assailed the Labor Arbiters decision for not ordering their reinstatement to their former
positions.
The NLRC modified the Labor Arbiters decision. It ordered petitioner to reinstate respondents to their former positions or to
pay them separation pay in case reinstatement was no longer feasible, with full backwages in either case. It also dropped Hermie Alejo
as a party to the case for he may not be held personally liable with petitioner to satisfy the judgment in favor of respondents. [11] The
NLRC ruled that respondents were regular employees, not independent contractors. It further held that petitioner failed to justify its
reason for terminating respondents and its failure to comply with the due process requirements.
Upon denial of the parties motions for reconsideration, petitioner filed a petition for certiorari before the Court of Appeals,
which dismissed the petition but affirmed the NLRC decision.
Hence, this petition with prayer for Temporary Restraining Order (TRO). On December 12, 2003, we issued a TRO enjoining
the Court of Appeals, NLRC, Labor Arbiter and respondents from implementing the appellate courts Decision and Resolution. [12]
Before this Court, petitioner claims that the Court of Appeals erred in,
(A) ...finding that respondents are regular employees of petitioner,
(B) finding that respondents were illegally dismissed by petitioner and
(C) order[ing] petitioner to reinstate respondents [to their former positions with full backwages] without loss
of seniority rights and should reinstatement not be feasible, to pay respondents separation pay.
[13]
(Emphasis supplied).
In effect, petitioner prays that we resolve the following issues: Are respondents regular employees of petitioner? Did they
abandon their work? Were they illegally dismissed by petitioner? If so, what benefits, if any, are due them?
Petitioner contends that employment for more than one year and performing carpentry works that were necessary and
desirable in petitioners usual trade and business are not controlling factors in determining whether respondents are regular
employees. Petitioner argues that Article 280[14] of the Labor Code and the circumstances which attended the relationship between the
parties, must be considered. The circumstances of the case, according to petitioner, show that respondents were not its regular
employees.Specifically, petitioner Eutiquio was an independent businessman and was contracted to render particular job orders using
his own methods and style. Further, Eutiquio hired his own workers and used his own house as his factory and work premises where
he kept his own tools, equipment and materials.[15]
Respondents point out that petitioner had offered inconsistent arguments. They note that before the Labor Arbiter, petitioner
argued that Eutiquio was an independent contractor. In its appeal and motion for reconsideration before the NLRC, petitioner prayed
that Eutiquio be declared a labor-only contractor. In this petition, it alleges that Eutiquio is an independent businessman. Respondents
insist that they are petitioners regular employees and that their job is necessary and desirable to its main business and day-to-day
operations.
At the outset, it should be stressed that whether respondents are regular employees or project employees or independent
contractors is a question of fact.[16] The unanimous finding of the Labor Arbiter, NLRC, and Court of Appeals that respondents were
petitioners regular employees, not independent contractors, binds this Court. Under Rule 45 of the Rules of Court, our jurisdiction is
limited to questions of law. Notably, petitioner not only urges us to reexamine the evidence presented below but to consider evidence
not presented before the Labor Arbiter. This practice of submitting evidence late is properly rejected as it defeats the speedy
administration of justice involving poor workers. It is also unfair.[17]
Besides, petitioner is barred from raising its new theory that Eutiquio is an independent businessman who uses his own house
as his factory. We consistently rejected this pernicious practice of shifting to a new theory on appeal in the hope of a favorable
result. Fair play, justice and due process require that as a rule new matters cannot be raised for the first time before an appellate
tribunal.[18]
Moreover, petitioners inconsistent arguments reflect its lack of candor and its attempt to confuse the issues in this case to
defeat respondents claims. Before us, petitioner even admits that respondents worked within its premises for purposes of convenience
especially so since the tools and materials necessary for the job belonged to it. [19] Recall also its position before the Labor Arbiter that
it allowed respondents to use its facilities for the proper implementation of job orders.
Worse, petitioner first argued that Eutiquio is an independent contractor and that respondents are project employees, only to
pray later that Eutiquio should be declared a labor-only contractor. It is also surprising how petitioner could argue that respondents are
not its employees, in view of its prayer before the NLRC that respondents be ordered to report back to work. And after the NLRC
ruled that respondents should be reinstated, it petitioned the Court of Appeals to dismiss respondents complaint.
Considering the submission of the parties, we are constrained to agree with the unanimous ruling of the Court of Appeals,
NLRC and Labor Arbiter that respondents are petitioners regular employees. Respondents were employed for more than one year and
their work as carpenters was necessary or desirable in petitioners usual trade or business of manufacturing office furniture. Under
Article 280 of the Labor Code, the applicable test to determine whether an employment should be considered regular or non-regular is
the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the
employer.[20]
True, certain forms of employment require the performance of usual or desirable functions and exceed one year but do not
necessarily result to regular employment under Article 280 of the Labor Code. [21] Some specific exceptions include project or seasonal
employment. Yet, in this case, respondents cannot be considered project employees.Petitioner had neither shown that respondents
were hired for a specific project the duration of which was determined at the time of their hiring nor identified the specific project or
phase thereof for which respondents were hired.
We also agree that Eutiquio was not an independent contractor for he does not carry a distinct and independent business, and
he does not possess substantial capital or investment in tools, equipment, machinery or work premises. [22] He works within petitioners
premises using the latters tools and materials, as admitted by petitioner. Eutiquio is also under petitioners control and
supervision. Attesting to this is petitioners admission that it allowed respondents to use its facilities for the proper implementation of
job orders.Moreover, the Implementing Guidelines regulating attendance, overtime, deadlines, penalties; providing petitioners right to
fire employees or contractors; requiring the carpentry division to join petitioners exercise program; and providing rules on machine
maintenance, all reflect control and supervision over respondents.
Petitioner likewise alleges that it did not dismiss respondents as they were not its regular employees; that respondents failed
to sufficiently establish the fact of illegal dismissal; and that respondents abandoned the work after it issued the Implementing
Guidelines.[23]
Having ruled that respondents are regular employees, we shall proceed to determine whether respondents have, as petitioner
contends, abandoned their work, or they have been illegally dismissed.
The consistent rule is that the employer must affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause, failing in which would make the termination illegal, as in this case. [24]
For accusing respondents of abandonment, petitioner must present evidence (1) not only of respondents failure to report for
work or absence without valid reason, but (2) also of respondents clear intention to sever employer-employee relations as manifested
by some overt acts. The second element is the more determinative factor.[25]
Here, petitioners argument in support of its abandonment charge was that respondents may have resented its issuance of the
Implementing Guidelines. This, in our view, fails to establish respondents intention to abandon their jobs. On the contrary, by filing
the complaint for illegal dismissal within two days of their dismissal on January 11, 2000and by seeking reinstatement in their position
paper, respondents manifested their intention against severing their employment relationship with petitioner and abandoning their
jobs. It is settled that an employee who forthwith protests his layoff cannot be said to have abandoned his work. [26]
Finally, Article 279 of the Labor Code,[27] provides that a regular employee who is unjustly dismissed from work is entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement. If reinstatement is no longer feasible, separation pay equivalent to one month salary for every year of service should be
awarded as an alternative. This has been our consistent ruling in the award of separation pay to illegally dismissed employees in lieu
of reinstatement.[28]
Hence, the four respondents, Eutiquio, Felicisimo, Jay and Leonardo, Sr., all surnamed Antonio, are entitled to backwages and
separation pay in case their reinstatement is no longer possible. Eutiquios and Jays bio-data reveal that they started working for
petitioner only in 1993 (not 1991) and 1998 (not 1993), respectively. Regrettably, we find no factual basis for respondents claim that
they received P250 per day. Petitioners manifestation reveals, however, that respondents earnings in 1999 were P211,385 or P169.37
each per day,[29] which is a little less than the P171.50 minimum wage.[30] The NLRC should consider that Eutiquio started only in 1993
and Jay, in 1998 and use P171.50 as respondents daily wage, not P250 or P169.37.
Lastly, we note the silence of the decisions below with respect to Enrico Alejo, in whose name petitioner is registered as a sole
proprietorship. Alejo as the sole proprietor is liable to respondents for backwages and separation pay. We also note that Enrico is
consistently represented as petitioners sole-proprietor in its pleadings including this petition.Therefore, respondents properly sought
the inclusion of Enrico Alejo as a proper or indispensable party to this case. Strictly speaking, he is the proper party in this case and
the one liable to respondents, for petitioner has no juridical personality to defend this suit. We have held that:
a sole proprietorship does not have a separate juridical personality that could enable it to file a suit in court. In fact,
there is no law authorizing sole proprietorships to file a suit in court.
A sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the
enterprise. The law merely recognizes the existence of a sole proprietorship as a form of business organization
conducted for profit by a single individual and requires its proprietor or owner to secure licenses and permits,
register its business name, and pay taxes to the national government. The law does not vest a separate legal
personality on the sole proprietorship or empower it to file or defend an action in court.[31]
WHEREFORE, the petition is DENIED for lack of merit. Petitioner thru its sole proprietor, Enrico Alejo, is ordered (1) to
reinstate the four respondents to their former positions without loss of seniority rights and other privileges or to pay them separation
pay in case reinstatement is no longer possible and (2) to pay them full backwages, in either case, computed from the time their
compensation was withheld from them up to the time of their actual reinstatement or up to the time it is determined that reinstatement
is no longer possible. The NLRC is also ordered to RECOMPUTE respondents backwages and separation pay, as aforementioned,
and execute the payments to respondents. Costs against the petitioner.
SO ORDERED.
THIRD DIVISION [G.R. No. 149859. June 9, 2004]

RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES
CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F. MAMARADLO, respondents.
DECISION
CORONA, J.:
Before us on appeal is the decision [1] of the Court of Appeals[2] dated June 22, 2001 affirming the decision [3] of the
National Labor Relations Commission[4] dated March 23, 1999 which, in turn, affirmed the decision [5] of labor arbiter Pedro
Ramos dated May 19, 1998 dismissing petitioner Radin Alciras complaint for illegal dismissal with prayer for
reinstatement, backwages, moral damages, exemplary damages and attorneys fees.
The facts follow.
Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor
on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated
petitioners services. The bone of contention centered on whether the termination occurred before or after the six-month
probationary period of employment.
The parties, presenting their respective copies of Alciras appointment paper, claimed conflicting starting dates of
employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents indicated
petitioners employment status as probationary (6 mos.) and a remark that after five months (petitioners) performance shall
be evaluated and any adjustment in salary shall depend on (his) work performance. [6]
Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior officer of
respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal
after the lapse of his probationary employment, petitioner filed on November 21, 1996 a complaint in the National Labor
Relations Commission (NLRC) against respondent Middleby contending that he had already become a regular employee
as of the date he was illegally dismissed. Included as respondents in the complaint were the following officers of
respondent Middleby: Frank Thomas (General Manager), Xavier Pea (Human Resources Manager) and Trifona
Mamaradlo (Engineering Manager).
In their defense, respondents claim that, during petitioners probationary employment, he showed poor performance
in his assigned tasks, incurred ten absences, was late several times and violated company rules on the wearing of
uniform. Since he failed to meet company standards, petitioners application to become a regular employee was
disapproved and his employment was terminated.
On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able to prove
that petitioner was apprised of the standards for becoming a regular employee; (2) respondent Mamaradlos affidavit
showed that petitioner did not perform well in his assigned work and his attitude was below par compared to the
companys standard required of him and (3) petitioners dismissal on November 20, 1996 was before his regularization,
considering that, counting from May 20, 1996, the six-month probationary period ended on November 20, 1996. [7]
On March 23, 1999, the NLRC affirmed the decision of the labor arbiter.
On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate court:
Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by Middleby, the same is not
crucial because there is no termination to speak of but rather expiration of contract. Petitioner loses sight of the fact that his
employment was probationary, contractual in nature, and one with a definite period. At the expiration of the period stipulated in the
contract, his appointment was deemed terminated and a notice or termination letter informing him of the non-renewal of his contract
was not necessary.
While probationary employees enjoy security of tenure such that they cannot be removed except for just cause as provided by law,
such protection extends only during the period of probation. Once that period expired, the constitutional protection could no longer be
invoked. Legally speaking, petitioner was not illegally dismissed. His contract merely expired. [8]
Hence, this petition for review based on the following assignment of errors:
I
THE COURT OF APPEALS GRAVELY ERRED, BLATANTLY DISREGARDED THE LAW AND ESTABLISHED
JURISPRUDENCE, IN UPHOLDING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION.
II
THE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN HOLDING THAT
PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.
III
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE PRESUMED TO HAVE
COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE OF THE STANDARDS TO MAKE HIM A
REGULAR EMPLOYEE.
IV
THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN NOT APPLYING TO
THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE COURT IN SERRANO VS. NLRC, ET. AL., G.R.
NO. 117040, JANUARY 27, 2000.[9]
Central to the matter at hand is Article 281 of the Labor Code which provides that:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from the date the employee
started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who
is allowed to work after a probationary period shall be considered a regular employee.
The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was
therefore already a regular employee at the time of his alleged dismissal. We rule in the negative.
Petitioner claims that under the terms of his contract, his probationary employment was only for five months as
indicated by the remark Please be informed that after five months, your performance shall be evaluated and any
adjustment in salary shall depend on your work performance. The argument lacks merit. As correctly held by the labor
arbiter, the appointment contract also stated in another part thereof that petitioners employment status was probationary
(6 mos.). The five-month period referred to the evaluation of his work. [10]
Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20,
1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996.
According to petitioners computation, since Article 13 of the Civil Code provides that one month is composed of thirty
days, six months total one hundred eighty days. As the appointment provided that petitioners status was probationary (6
mos.) without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on
November 20, 1996, he was already a regular employee.
Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al.,[11] this Court dealt with
the same issue of whether an employment contract from May 16, 1995 to November 15, 1995 was within or outside the
six-month probationary period. We ruled that November 15, 1995 was still within the six-month probationary period. We
reiterate our ruling in CALS Poultry Supply:
(O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the
6th month following.(italics supplied)
In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary
employee when respondent Middleby opted not to regularize him on November 20, 1996.
The second issue is whether respondent Middleby informed petitioner of the standards for regularization at the start
of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of
1997) provides that:
xxx xxx xxx
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he
shall be deemed a regular employee.
xxx xxx xxx
We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee
when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months.
In Orient Express Placement Philippines vs. National Labor Relations Commission,[12] we ruled that an employer failed to
inform an employee of the reasonable standards for becoming a regular employee:
Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever
mentioned that he must first take and pass a Crane Operator's License Examination in Saudi Arabia before he would be allowed to
even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in
the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after
his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be
faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence
upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was laid out except that he was to be on
probation for three (3) months.(emphasis supplied)
Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises
the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree with the
labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This rans (sic) counter to the agreement between the parties that after five months
of service the petitioners performance would be evaluated. It is only but natural that the evaluation should be made vis--vis the
performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact
that petitioner did not perform well in his assigned work and his attitude was below par compared to the companys standard required
of him.[13]
The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to
renew his contract on the last day of his probationary employment.
It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional
protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to
qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time
of their engagement.[14]
But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission [15] that this constitutional
protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate
their contract of employment. Manlimos concluded that (t)his development has rendered moot the question of whether
there was a just cause for the dismissal of the petitioners xxx. [16] In the case at bar, respondent Middleby exercised its
option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not
intend to grant him a regular status.
Although we can regard petitioners severance from work as dismissal, the same cannot be deemed illegal. As found
by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times
(3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily
refute these substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its
employment relationship with petitioner.
WHEREFORE, the petition is hereby DENIED.
No costs.
SO ORDERED.
FIRST DIVISION
JIMMY KENT RAMBUYON, JOVITO
CONDEZA, TONY MAQUIDATO, NESTOR
ODCHIGUE, NICOLAS GOMONID,
JULITO SISLES, ROBERTO* PILA, VITO
AGAGARING, RUBEN SALE, ELEAZAR
CAGO,
Petitioners,
G.R. No. 157029

Present:
Davide, Jr., C.J.,
(Chairman),
Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.
- versus FIESTA BRANDS, INC.,
Respondent.
Promulgated:
December 15, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
For review on certiorari are the resolutions dated July 31, 2002 [1] and January 6, 2003[2] of the Court of Appeals in CA-G.R.
SP No. 71438. The said resolutions had dismissed herein petitioners special civil action for certiorari on the ground that the
verification and certification of non-forum shopping was signed by only one of the petitioners.
The antecedent facts are as follows:
Respondent Fiesta Brands, Inc. is a corporation engaged in the manufacture of desiccated coconut and other coconut products
for export. Its office is located at Medina, Misamis Oriental.
In processing desiccated coconut, shelling is the first step in the production process. At this stage, the coconut shell is
removed using a shelling machine. The workers assigned in this stage are called shellers.
Respondent employed 105 workers each shift to work as shellers. However, when there is oversupply of coconuts,
respondent is constrained to hire extra hands to work as shellers. In the same manner, when a regular employee is unable to report for
work, respondent would hire a temporary replacement. These extra workers, whether shellers or temporary replacement are taken from
the work pool of extra shellers. They receive P158 per day for shelling a minimum of 1,400 coconuts. If they finish shelling the said
minimum number of coconuts ahead of the normal eight-hour daily work, they immediately go home unless they want to render
overtime work.
In August 2000, respondent implemented a new shelling system wherein the extra shellers were paid P220 per day, but this
time the quota per eight-hour daily labor was fixed at 2,000 coconuts. Those who subscribed to the new shelling system were
accredited and given preference over the others in the pool of extra shellers who refused to adopt the new system.
Petitioners herein, together with two other extra shellers, refused to embrace respondents new shelling system. As a
consequence, petitioners were not given preference in hiring. Finding themselves jobless, they filed consolidated cases [3] for illegal
dismissal in Regional Arbitration Branch No. 10 in Cagayan de Oro City.
In a decision[4] dated March 30, 2000, Labor Arbiter Rexel M. Pacuribot ordered the dismissal of the complaint for lack of
merit. The Labor Arbiter found that the extra shellers in the work pool, such as the petitioners herein, were not regular employees of
respondent. Thus, the Labor Arbiter held that petitioners were not dismissed, but were simply not given work assignments because of
their unjustified refusal to adopt the new shelling system being implemented by respondent.
On appeal, the National Labor Relations Commission (NLRC), in its resolution [5] of September 19, 2001, affirmed the Labor
Arbiters ruling. It reasoned that petitioners adamant refusal to work under the new shelling system cannot be accepted and sustained
without infringing respondents management prerogative to introduce measures aimed at maximizing production. To quote the
pertinent portion of the NLRC decision:
It is established on record that respondent maintains a work poll (sic) of extra-shellers from which it draws
the needed shellers to work when there is an oversupply or surplus of coconuts for shelling. Complainants
admittedly belong to this work pool so that if they were not given work because apart from no available excess
supply of coconuts they refused to work under the new shelling system, they cannot claim that they were dismissed,
muchless (sic) illegally.[6]
Dissatisfied, petitioners filed a motion for reconsideration, which was denied for lack of merit by the NLRC in its
resolution[7] of March 20, 2002. Undaunted, petitioners filed with the Court of Appeals a special civil action for certiorari ascribing to
the NLRC grave abuse of discretion.
However, the petitions verification and certification of non-forum shopping were signed by only one of the petitioners
therein. Thus, the Court of Appeals, in its resolutions dated July 31, 2002 and January 6, 2003, dismissed the petition for being
insufficient in form and substance in violation of Sections 4[8] and 5[9] of Rule 7 of the Revised Rules of Court.
Petitioners now come to us on a petition for review of the said resolutions of the Court of Appeals alleging that:
I. WITH DUE RESPECT, THE RESOLUTION OF THE HONORABLE COURT OF APPEALS DISMISSING
THE PETITION ON THE GROUND OF VIOLATION OF SECTIONS 4 AND 5 OF RULE 7 OF THE
RULES OF CIVIL PROCEDURE IS NOT IN ACCORDANCE WITH LAW AND JURISPRUDENCE;
II. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS ABUSED ITS DISCRETION IN
DISREGARDING THE EXPLANATION OF PETITIONERS FOR THE INABILITY TO SIGN THE
VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING; AND
III. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS ABUSED ITS DISCRETION IN NOT
PREVENTING MISCARRIAGE OF JUSTICE AND NOT APPLYING THE PRINCIPLE OF SOCIAL
JUSTICE AND PROTECTION TO LABOR.[10]
Petitioners argue that there is nothing in Sections 4 and 5 of Rule 7 that require all the petitioners to execute and sign the
verification and certification of non-forum shopping. Petitioners cite Escorpizo v. University of Baguio[11] in insisting that the
certification of non-forum shopping may be signed by any of the principal parties, not necessarily all of the principal parties.
Petitioners also contend that the claimed difficulty in locating each and every one of the petitioners constitutes a compelling
reason why they failed to jointly sign the verification and certification of non-forum shopping.
Finally, petitioners cry illegal dismissal. They allege that they are regular employees performing activities usually necessary
and desirable in the business or trade of respondent. They claim that they were terminated without just cause and without notice and
hearing.
For its part, respondent maintains that the Court of Appeals correctly dismissed the petition for certiorari. Citing Sections 4
and 5 of Rule 7, respondent argues that the verification and certification of non-forum shopping must be signed by all the petitioners.
It dismissed as flimsy and baseless the explanation on why the other petitioners failed to sign the said verification and certification.
Finally, respondent contends that petitioner could not raise the factual issue of illegal dismissal in a petition for certiorari.
While this Court adheres to the principle of social justice and protection to labor, we find the instant petition bereft of merit.
Petitioners appreciation of the Escorpizo[12] case is less than accurate. The petitioners therein were Esperanza Escorpizo, a
dismissed teacher, and the union to which she belonged, the University of Baguio Faculty Education Workers Union. Neither the
teacher nor the union signed the certification of non-forum shopping. It was their counsel who executed and signed the certification.
We thus held that the certification of non-forum shopping must be by the plaintiff or any of the principal party and not the attorney.
[13]
Escorpizo laid down the doctrine that a certification of non-forum shopping signed only by the parties counsel is insufficient.
Nowhere in the said case, other than a mere obiter dictum, did we categorically rule that a certification of non-forum shopping signed
by only one of the principal parties is sufficient compliance with the rules. Therefore, petitioners reliance on Escorpizo is patently
misplaced.
The rule on this matter is well-settled. Supreme Court (SC) Circular No. 28-91, [14] as amended by SC Administrative Circular
No. 04-94,[15] specifically mandates that the certification of non-forum shopping must be signed by all the petitioners and failure to do
so shall be a cause for the dismissal of the petition.
In the cases of United Residents of Dominican Hill, Inc. v. Commission on the Settlement of Land Problems [16] and Docena v.
Lapesura,[17] we held that the certification of non-forum shopping should be signed by all of the petitioners in a case, and that the
signing by only one of them is insufficient.
However, in Loquias v. Office of the Ombudsman,[18] we qualified the rule and stated that where there are two or more
petitioners, a petition signed by only one of them is defective, unless he was duly authorized by his co-parties to represent them and to
sign the certification.
Thus, absent a showing that the sole affiant in this case, petitioner Jimmy Kent Rambuyon, was duly authorized by the other
nine petitioners[19] to represent them and to sign the certification, the Court of Appeals did not err in dismissing the petition for being
insufficient in form.
Petitioner Rambuyons excuse that it was difficult to locate his co-petitioners is untenable. Records show that he, together
with each and every one of his nine co-petitioners, did sign the verification of the Position Paper [20] they filed with the Labor Arbiter.
Thus, we are not prepared to indulge his plea for liberal construction of the rules.Utter disregard of the rules cannot justly be
rationalized by harking on the policy of liberal construction. [21] The attestation contained in the certification of non-forum shopping
requires personal knowledge by the party who executed the same. [22] It cannot be presumed that petitioner Rambuyon knew, to the best
of his knowledge, whether his nine other co-petitioners had the same or similar actions or claims filed or pending.
Anent the final issue, petitioners arguments ring hollow.
Petitioners are raising factual issues which are not proper in a petition for review. Well-entrenched is the rule that in an appeal
via certiorari, only questions of law may be reviewed. The question of whether petitioners were regular employees and were dismissed
without notice and hearing is a factual issue. It had been exhaustively discussed and ruled upon in the negative by both the Labor Arbiter
and the NLRC. It bears stressing that factual findings of quasi-judicial bodies that have acquired expertise are generally accorded great
respect and even finality, if they are supported by substantial evidence.[23]
In this case, we find no cogent reason to disturb the factual findings of the Labor Arbiter as affirmed by the NLRC. We find
supported by evidence on record their finding that petitioners were not illegally dismissed, and that they were not regular employees to
begin with.
WHEREFORE, the petition is DENIED. The assailed resolutions, dated July 31, 2002 and January 6, 2003, of the Court of
Appeals in CA-G.R. SP No. 71438 areAFFIRMED. No pronouncement as to costs.
SO ORDERED.
SECOND DIVISION
ROSITA
PANGILINAN,
YOLANDA
LAYOLA, SALLY GOLDE, AIDA QUITE,
FERDINAND CALE, RAUL ARUITA,
MANUEL ERIFUL, ARNEL PAULO,
ROSEMARIE
GEOTINA,
SAMUELA
KUMAR, REBECCA PEREZ, EDGAR
BELLO, JOSEPH SORIANO, DANILO
AMPULLER,
TOLENTINO
CALLAO,
MANOLITA
MANALANG,
TORIBIO
LETIM, NANCY BELGICA, ALFREDO
ARELLANO, JOSEFA CEBUJANO, JUN
DEL ROSARIO, AVELINO AGUILAR,
MILAROSA
TIAMSON,
EDNA
DICHOSO, JASMIN BOLISAY, JULIETA
DIDAL, GERARDO BARISO, ANGELITO
PEAFLOR,
NERISSA
LETIM,
ALEXANDER BARBOSA, ELIZABETH
SAENS, NYMPHA LUGTU, MYRNA
MORALES, LIZA CRUZ, ELENA FANG,
EDNA CRUZA, GORGONIO PALMA,
JOSE VERGARA, ALDRIN REMORQUE,
RUDY BLANCO, MARIO BUENVIAJE,
MA. CRISTY CEA, REYNALDO GUELAS
VILLASENOR, RHOY TADO, LYDIA
SALIPOT,
ANGELITO
PEREZ
VERGARA, RODOLFO GACHO, JESSIE
G.R. No. 149329
Present:
PUNO, J., Chairman,

SAN PEDRO, MARINAO ORCA, JR.,
PEBELITO LERONA, PEPE CONGRESO,
NIMFA
NAPAO,
WILHELMINA BAGUISA,
OLIVIA
CAINCAY, JERRY MANUEL NICOLAS,
CARLOS ABRATIQUE, JESUS LIM, JR.,
AND GERRY ROXAS,
QUISUMBING,
MARTINEZ,
CALLEJO, SR., and
TINGA, JJ.
Petitioners,
Promulgated:
- versus -
July 12, 2004

GENERAL MILLING CORPORATION,
Respondent.
x--------------------------------------------------x
DECISION
CALLEJO, SR., J.:
Before this Court is a petition for review on certiorari of the Decision [1] of the Court of Appeals in CA-G.R. SP
No. 51678 and its Resolution denying the motion for reconsideration thereon.
The Antecedents
The respondent General Milling Corporation is a domestic corporation engaged in the production
and sale of livestock and poultry. [2] It is, likewise, the distributor of dressed chicken to various restaurants
and establishments nationwide.[3] As such, it employs hundreds of employees, some on a regular basis and
others on a casual basis, as emergency workers.
The petitioners[4] were employed by the respondent on different dates as emergency workers at its poultry
plant in Cainta, Rizal, under separate temporary/casual contracts of employment for a period of five
months.[5] Most of them worked as chicken dressers, while the others served as packers or helpers. [6] Upon
the expiration of their respective contracts, their services were terminated. They later filed separate
complaints for illegal dismissal and non-payment of holiday pay, 13 th month pay, night-shift differential and
service incentive leave pay against the respondent before the Arbitration Branch of the National Labor
Relations Commission, docketed as NLRC Case No. RAB-IV-9-4519-92-RI; NLRC Case No. RAB-IV-9-4520-92RI; NLRC Case No. RAB-IV-9-4521-92-RI; NLRC Case No. RAB-IV-9-4541-92-RI; NLRC Case No. RAB-IV-104552-92-RI; NLRC Case No. RAB-IV-10-4595-92-RI and NLRC Case No. RAB-IV-11-4599-92-RI. [7]
The petitioners alleged that their work as chicken dressers was necessary and desirable in the usual
business of the respondent, and added that although they worked from 10:00 p.m. to 6:00 a.m., they were
not paid night-shift differential. [8] They stressed that based on the nature of their work, they were regular
employees of the respondent; hence, could not be dismissed from their employment unless for just cause
and after due notice. In support thereof, the petitioners cited the decision of the Honorable Labor Arbiter
Perlita B. Velasco in NLRC Case No. NCR-6-2168-86, entitled Estelita Jayme, et al. vs. General
Milling Corporation; and NLRC Case No. NCR-9-3726-86, entitled Marilou Carino, et al. vs. General Milling
Corporation.[9] They
asserted
that
the
respondent
GMC
terminated
their contract
of employment without just cause and due notice. They further argued that the respondent could not
rely on the nomenclature of their employment as temporary or casual.
On August 18, 1997, Labor Arbiter (LA) Voltaire A. Balitaan rendered a decision in favor of the petitioners
declaring that they were regular employees. Finding that the termination of their employment was not
based on any of the just causes provided for in the Labor Code, the LA declared that they were allegedly
illegally dismissed. The decretal portion of the decision reads:
WHEREFORE, judgment is hereby rendered in these cases, as follows:
1.
Declaring respondent corporation guilty of illegally dismissing

complainants, except Rosalina Basan and Filomena Lanting whose complaints
are hereby dismissed on ground of prescription, and as a consequence therefor
ordering the said respondent corporation to reinstate them to their former
positions without loss of seniority rights and other privileges and with full
backwages from the time they were illegally dismissed in the aggregate amount
of P15,328,594.04;
2.
Ordering respondent corporation to pay the said complainants their 13th

month pay, holiday pay and service incentive leave pay in the aggregate
amount of P1,979,148.23;
3.
Ordering respondent corporation to pay said complainants the amount

of P1,730,744.22
by
way
of
attorneys
fees,
representing
ten
(10%) percentum of the total judgment awards.
The case against individual respondent Medardo Quiambao is hereby dismissed. [10]
A copy of the decision was sent by registered mail to the respondent on October 23, 1997 under
Registered Mail No. 004567 addressed to Atty. Emmanuel O. Pacsi, counsel for GMC, 6 th Floor, Corinthian
Plaza Bldg., 121 Paseo de Roxas, Makati City. [11] However, Beth Cacal, a clerk of the respondent GMC
received the said decision on October 28, 1997. [12] Contending that a copy thereof was received only on
November 3, 1997, the respondent filed an appeal on November 12, 1997, before the National Labor
Relations Commission (NLRC), docketed as NLRC NCR CA No. 014462-98. The petitioners filed a Motion to
Dismiss Respondents Notice of Appeal/Appeal Memorandum on the ground that the appeal was filed five
days late, considering that the August 18, 1997 Decision was received by the respondent through its
employee, Beth Cacal, on October 28, 1997.[13]
The respondent opposed the motion, contending that Cacal was a mere clerk, and was not a member of
the staff of its Legal Department. It further contended that the Legal Department was located at the sixth
(6th) floor of Corinthian Plaza and had its own staff, including the legal secretary who served as the Legal
Departments receiving clerk.[14]Invoking Section 10, Rule 13 of the Rules of Court, in relation to Section 2
thereof, the respondent alleged that Cacals receipt of the mail and/or decision was not equivalent to
receipt by its counsel. In support thereof, the respondent cited the cases of Adamson University v.
Adamson University Faculty and Employees Association,[15] and PLDT vs. NLRC.[16]
On May 25, 1998, the NLRC rendered a decision reversing that of the Labor Arbiter, the dispositive portion
of which is herein quoted:
WHEREFORE, except for its award of 13 th month pay, holiday pay and service incentive
leave pay in the aggregate amount of P1,979,148.23 which is hereby affirmed, the
appealed decision is set aside for being contrary to settled jurisprudence. [17]
The NLRC ruled that the respondent GMC filed its appeal within the reglementary period. Citing the case
of Caete v. NLRC[18] which, in turn, cited Adamson v. Adamson[19]and United Placement International v.
NLRC,[20] the NLRC held that service by registered mail is completed only upon actual receipt thereof by the
addressee. Since the addressee of the mail is the respondents counsel and the person who received it was
a non-member of the Legal Staff, the decision cannot be said to have been validly served on the
respondents counsel on October 28, 1997.
The NLRC also held that the petitioners, who were temporary or contractual employees of the respondent,
were legally terminated upon the expiration of their respective contracts. Citing the case of Brent School,
Inc. vs. Zamora,[21] the NLRC explained that while the petitioners work was necessary and desirable in the
usual business of GMC, they cannot be considered as regular employees since they agreed to a fixed term.
The petitioners motion for reconsideration of the decision having been denied by the NLRC on
October 12, 1998,[22] they filed a petition for certiorari before the Court of Appeals and assigned the
following errors:
I
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK AND/OR IN EXCESS OF ITS JURISDICTION IN
ENTERTAINING AND GIVING DUE COURSE TO RESPONDENT COMPANYS APPEAL WHICH WAS
UNDENIABLY FILED OUT OF TIME AND CONSEQUENTLY SETTING ASIDE THE FINAL DECISION
OF THE LABOR ARBITER.
II
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN HOLDING THAT PETITIONERS DISMISSAL WAS LEGAL ON THE GROUND OF
EXPIRATION OF EMPLOYMENT CONTRACT WHICH IS NOT A STATUTORY CAUSE UNDER THE
LABOR CODE.
III
THE RESPONDENT COMMISSION [S]ERIOUSLY ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN NOT FINDING THAT PETITIONERS, AS REGULAR EMPLOYEES, CANNOT BE
DISMISSED WITHOUT JUST CAUSE AND THE REQUIRED DUE PROCESS.[23]
On September 29, 2000, the CA rendered a decision affirming with modification the decision of the
NLRC, the decretal portion of which reads:
WHEREFORE, the appealed decision of the NLRC is hereby AFFIRMED, with the
MODIFICATION that the award of 13th month pay, holiday pay, and service incentive leave
pay shall cover only the year or years when petitioners were actually employed with herein
respondent General Milling Corporation.[24]
The CA ruled that no grave abuse of discretion could be imputed to the NLRC, considering that the
ten-day period to appeal began to run only from the date the decision of the LA was validly served on the
respondents counsel. The appellate court also ruled that even assuming arguendo that the respondent
GMCs appeal was filed late, in view of the substantial amount involved, giving due course to the appeal did
not amount to grave abuse of discretion.
On the merits of the petition, the CA ruled that where the duties of the employee consist of activities
usually necessary or desirable in the usual business of the employer, it does not necessarily follow that the
parties are forbidden from agreeing on a period of time for the performance of such activities, and cited
the case of St. Theresas School of Novaliches Foundation v. NLRC.[25] The CA affirmed the entitlement of
the petitioners to a proportionate thirteenth (13 th) month pay for the particular year/s the petitioners were
employed. As to the awards of holiday pay and service incentive leave pay, the CA ruled that they should
be limited to the year/s of actual service.[26]
The petitioners filed a motion for reconsideration of the said decision, which was denied on July 24, 2001.
[27]
The Present Petition
The petitioners filed the instant petition, ascribing the following errors to the appellate court:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND ACTED WITHOUT JURISDICTION
WHEN IT MODIFIED THE LABOR ARBITERS JUDGMENT THAT HAS BECOME FINAL AND
EXECUTORY FOR FAILURE OF THE RESPONDENT TO APPEAL WITHIN THE REGLEMENTARY
PERIOD.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DECISION OF
THE LABOR ARBITER WAS DEEMED SERVED NOT ON THE DATE WHEN THE DECISION WAS
DELIVERED BY THE POSTMASTER TO THE OFFICE OF THE RESPONDENTS LAWYER, BUT ON
THE DATE WHEN THE RECEIVING CLERK GAVE THE DECISION TO THE LAWYER.
III
THE RESPONDENTS PRACTICE OF HIRING CHICKEN DRESSERS ON A 5-MONTH CONTRACT
AND REPLACING THEM WITH ANOTHER SET OF 5-MONTH CONTRACT WORKERS, OBVIOUSLY
TO PREVENT THEM FROM ATTAINING REGULAR STATUS, IS VIOLATIVE OF THE CONSTITUTION
AND ARTICLES 279 AND 280 OF THE LABOR CODE.[28]
The issues for resolution are (a) whether or not the respondents appeal from the Labor Arbiters decision
was filed within the reglementary period therefor; and, (b) whether or not the petitioners were regular
employees of the respondent GMC when their employment was terminated.
In petitions for review on certiorari of the decision of the CA, only errors of law are generally reviewed.
[29]
Normally, the Supreme Court is not a trier of facts. [30] In the absence of any showing that the NLRC
committed grave abuse of discretion, or otherwise acted without or in excess of jurisdiction, the Court is
bound by its findings.[31] Such findings are not infallible, however, particularly when there is a showing that
they were arrived at arbitrarily or in disregard of the evidence on record. In such case, they may be reexamined
by
the
Court.
Hence, when the factual findings of the NLRC are contrary to those of the Labor Arbiter, the evidentiary
facts may be reviewed by the appellate court.[32] Considering that the NLRCs findings clash with those of
the Labor Arbiters, this Court is compelled to go over the records of the case as well as the submissions of
the parties.[33]
The Ruling of the Court

The petition is bereft of merit.
Anent the first issue, we agree with the CA that the NLRC did not act with grave abuse of discretion when it
gave due course to the appeal of the respondent. Decisions of the Labor Arbiter are final and executory,
unless appealed to the Commission, within ten (10) calendar days from receipt thereof. [34] Copies of
decisions or final awards are served on both parties and their counsel by registered mail, [35] and such
service by registered mail is completed upon actual receipt by the addressee or five (5) days from receipt
of the first notice of the postmaster, whichever is earlier. [36]
The records show that the August 18, 1997 Decision of the Labor Arbiter was served via registered
mail, addressed to the respondent GMCs counsel, Atty. Emmanuel O. Pacsi, at the sixth (6 th) Floor,
Corinthian Plaza Bldg., 121 Paseo de Roxas, Makati City. [37] It was received by Beth Cacal, a clerk of the
respondent, on October 28, 1997. The petitioners insist that Cacal is a person with authority to receive
legal and judicial correspondence for the respondents Legal Department. They point out that such
authority to receive mail for and in behalf of the respondents Legal Department is bolstered by the
certification from the Makati Post Office that she received the copy of their motion to dismiss the appeal,
addressed to the said department.
The respondent GMC counters that the service of the LAs decision to a person not connected to its
Legal Department is not a valid service, and that it is only when a copy of such decision is actually given to
such department that a valid service of the decision is deemed to have been made. Stressing that factual
issues are not proper in a petition for certiorari under Rule 45, the respondent no longer discussed Cacals
authority to receive legal and judicial communications for the respondent.
A review of the records reveal that Cacal was a clerk at the respondents office and was assigned at
the sixth floor of the Corinthian Plaza Bldg. She was not assigned at the respondents Legal Department,
which has its own office staff, including a secretary who serves as the departments receiving clerk. [38] The
Court has ruled that a service of a copy of a decision on a person who is neither a clerk nor one in charge
of the attorneys office is invalid.[39] Thus, there was no grave abuse of discretion on the part of the NLRC in
giving due course to the respondents appeal.
On the second issue, we agree that the petitioners were employees with a fixed period, and, as such, were
not regular employees.
Article 280 of the Labor Code comprehends three kinds of employees: (a) regular employees or those
whose work is necessary or desirable to the usual business of the employer; (b) project employees or those
whose employment has been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or where the work or services
to be performed is seasonal in nature and the employment is for the duration of the season; and, (c) casual
employees or those who are neither regular nor project employees. [40]
A regular employee is one who is engaged to perform activities which are necessary and desirable
in the usual business or trade of the employer as against those which are undertaken for a specific project
or are seasonal.[41] There are two separate instances whereby it can be determined that an employment is
regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual
business or trade of the employer; and, (2) if the employee has been performing the job for at least a year.
[42]
In the case of St. Theresas School of Novaliches Foundation vs. NLRC,[43] we held that Article 280 of
the Labor Code does not proscribe or prohibit an employment contract with a fixed period. We furthered
that it does not necessarily follow that where the duties of the employee consist of activities usually
necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a
period of time for the performance of such activities. There is thus nothing essentially contradictory
between a definite period of employment and the nature of the employees duties.
Indeed, in the leading case of Brent School Inc. v. Zamora,[44] we laid down the guideline before a
contract of employment may be held as valid, to wit:
[S]tipulations in employment contracts providing for term employment or
fixed period employment are valid when the period were agreed upon knowingly
and voluntarily by the parties without force, duress or improper pressure, being
brought to bear upon the employee and absent any other circumstances vitiating
his consent, or where it satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter. [45]
An examination of the contracts entered into by the petitioners showed that their employment was
limited to a fixed period, usually five or six months, and did not go beyond such period.
TEMPORARY/CASUAL CONTRACT OF EMPLOYMENT
KNOW ALL MEN BY THESE PRESENTS:
That the GENERAL MILLING CORPORATION, hereby temporarily hires
________________ as Emergency worker for a period beginning from ____________ to
_____________, inclusive, at the rate of _____________ per day, payable every 15th [day] and
end of each month.
________________ hereby binds and obligates himself/herself to perform his/her assigned
work diligently and to the best of his/her ability, and promise to obey all lawful orders of
his/ her superior and/or representatives made in connection with the work for which he/she
is employed.
IT IS CLEARLY STIPULATED THAT THE CONDITION OF THIS EMPLOYMENT SHALL BE
AS FOLLOWS:
1.
This employment contract shall be on a DAY-TO-DAY BASIS and shall
not extend beyond the period specified above;
2.
The employee aforementioned may be laid off or separated from the
Firm, EVEN BEFORE THE EXPIRY DATE OF THIS CONTRACT, if his/her services are no longer
needed, or if such services are found to be unsatisfactory, or if she/he has violated any of
the established rules and regulations of the Company;
3.
In any case, the period of employment shall not go beyond the
duration of the work or purpose for which the aforementioned employee has been
engaged;
4.
That the employee hereby agrees to work in any work shift schedule
that may be assigned to him by the Firm during the period of this contract; and
This Temporary/Casual Employment contract, unless sooner terminated for any of
the causes above-cited, shall then automatically cease on its expiry date, without the
necessity of any prior notice to the employee concerned.[46]
The records reveal that the stipulations in the employment contracts were knowingly and
voluntarily agreed to by the petitioners without force, duress or improper pressure, or any circumstances
that vitiated their consent. Similarly, nothing therein shows that these contracts were used as a subterfuge
by the respondent GMC to evade the provisions of Articles 279 and 280 of the Labor Code.
The petitioners were hired as emergency workers and assigned as chicken dressers, packers and
helpers at the Cainta Processing Plant. The respondent GMC is a domestic corporation engaged in the
production and sale of livestock and poultry, and is a distributor of dressed chicken. While the petitioners
employment as chicken dressers is necessary and desirable in the usual business of the respondent, they
were
employed
on
mere
temporary
basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular
employees, but are merely contractual employees. Consequently, there was no illegal dismissal when the
petitioners services were terminated by reason of the expiration of their contracts. [47] Lack of notice of
termination is of no consequence, because when the contract specifies the period of its duration, it
terminates on the expiration of such period. A contract for employment for a definite period terminates by
its own term at the end of such period.[48]
In sum, we rule that the appeal was filed within the ten (10)-day reglementary period. Although the
petitioners who mainly worked as chicken dressers performed work necessary and desirable in the usual
business of the respondent, they were not regular employees therein. Consequently, the termination of
their employment upon the expiry of their respective contracts was valid.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED DUE COURSE. The Decision
of the Court of Appeals in CA-G.R. SP No. 51678 isAFFIRMED. No costs.
SO ORDERED.
SECOND DIVISION
BERNARDINO
LABAYOG,
CRESENCIO GRANZORE,
JEANETTE
GONZALES,
NOEME
DADIZ,
GEMMA
PANGANIBAN,
DALISAY
BUENVIAJE,
VICTORIANA
RUEDAS,
MA.
VICTORIA
CABALONG, AMALIA SALVARRI, ROWENA
FERNANDEZ, DELIA LOZARES, LUNINGNING
ANGELES,
ROSEMARIE
SALES,
VIVIAN
VERZOSA,
MARILYN
JOSE,
ROSANNA
ROLDAN,
HERMINIO
CARANTO,
ANITA
SALVADOR, JORGE SALAMAT, ROBERTO
ODIAMAR, EFREN LACAMPUINGAN, NOEL
TAGALOG, MARCOS DE LA CRUZ, ELIAS
BELO, DARIUS EROLES, HELEN BARAYUGA,
[1]
CRISTOPHER HILARIO, JOEL ESGUERRA,
BERNABE DUCUT, JOSEPH TANAUY, EDWIN
CEA, NOEL VILLASCA, ERNESTO ALFONSO,
FERNANDO CEBU and REYNALDO SESBRENO,
G.R. No. 148102

Present:
PANGANIBAN, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA and
GARCIA, JJ.
[2]
Petitioners,
-versusM.Y. SAN BISCUITS, INC. and

MEW WAH LIM,
Respondents. Promulgated:
July 11, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CORONA, J.:
The subject of this petition for review on certiorari is the resolution [3] of the Court of Appeals (CA)
dated January 31, 2001 in CA-G.R. SP No. 51390, the dispositive portion of which read:
WHEREFORE, private respondents motion for reconsideration is GRANTED. The decision of this
court, promulgated [on] September 12, 2000, is REVERSED and SET ASIDE. The decision of the
National Labor Relations Commission dated August 22, 1997 and its resolution dated November 24, 1997
are hereby AFFIRMED. No costs.
At the outset, this petition should have been denied for lack of proper verification and certification of nonforum
shopping.
Of
the
35
petitioners,
only
Bernardino Labayog, Luningning Angeles
and
Rosanna Roldan signed.[4] But even if, in the exercise of its discretion and in the interest of substantial justice,
this Court grants a liberal interpretation of the rules on verification and certification of non-forum shopping,
this petition should nonetheless fail for lack of merit.
The facts follow.
On various dates in 1992, petitioners entered into contracts of employment with respondent company as
mixers, packers and machine operators for a fixed term. On the expiration of their contracts, their services
were terminated. Forthwith, they each executed a quitclaim.
On April 15, 1993, petitioners filed complaints for illegal dismissal, underpayment of wages, non-payment of
overtime, night differential and 13 thmonth pay, damages and attorneys fees. The labor arbiter ruled their
dismissal to be illegal[5] on the ground that they had become regular employees who performed duties
necessary and desirable in respondent companys business. The labor arbiter ordered the reinstatement of
petitioners with award of backwages, 13th month pay and service incentive leave pay. The claim for moral and
exemplary damages was denied for failure to establish bad faith on the part of respondents. All other claims
were likewise denied.
On appeal to the National Labor Relations Commission (NLRC), the decision of the labor arbiter was set aside.
[6]
Having entered into their employment contracts freely and voluntarily, they knew that their employment
was only for a fixed period and would end on the prescribed expiration date. Petitioners motion for
reconsideration was denied.[7]
In a petition for certiorari filed by petitioners, the CA set aside the NLRC decision and reinstated the
decision of the labor arbiter.[8]However, on respondents motion for reconsideration, the CA reversed itself. The
CA reasoned that, while petitioners performed tasks which were necessary and desirable in the usual
business of respondent company, their employment contracts providing for a fixed term remained valid. No
force, duress, intimidation or moral dominance was exerted on them. Respondents dealt with petitioners in
good faith and within the valid parameters of management prerogatives. [9] Petitioners motion for
reconsideration was denied.[10] Hence, this recourse.
The petition is denied for lack of merit.
The Labor Code states:

Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is seasonal in nature and
the employment is for the duration of the season.
Where the duties of the employee consist of activities which are necessary or desirable in the usual
business of the employer, the parties are not prohibited from agreeing on the duration of employment. Article
280 does not proscribe or prohibit an employment contract with a fixed period [11] provided it is not intended to
circumvent the security of tenure.
Two criteria validate a contract of employment with a fixed period: (1) the fixed period of employment
was knowingly and voluntarily agreed upon by the parties without any force, duress or improper pressure
being brought to bear on the employee and without any circumstances vitiating consent or, (2) it satisfactorily
appears that the employer and employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former on the latter. [12] Against these criteria, petitioners
contracts of employment with a fixed period were valid.
Each contract provided for an expiration date. Petitioners knew from the beginning that the
employment offered to them was not permanent but only for a certain fixed period. [13] They were free to accept
or to refuse the offer. When they expressed their acceptance, they bound themselves to the contract.
In this case, there was no allegation of vitiated consent. Respondents did not exercise moral
dominance over petitioners. The contracts were mutually advantageous to the parties. While respondents were
able to augment increased demand in production by hiring petitioners on an as-needed basis, petitioners
found gainful employment if only for a few months.
Simply put, petitioners were not regular employees. While their employment as mixers, packers and
machine operators was necessary and desirable in the usual business of respondent company, they were
employed temporarily only, during periods when there was heightened demand for production. Consequently,
there could have been no illegal dismissal when their services were terminated on expiration of their
contracts. There was even no need for notice of termination because they knew exactly when their contracts
would end. Contracts of employment for a fixed period terminate on their own at the end of such period.[14]
Contracts of employment for a fixed period are not unlawful. What is objectionable is the practice of
some scrupulous employers who try to circumvent the law protecting workers from the capricious termination
of employment. Employers have the right and prerogative to choose their workers. The law, while protecting
the rights of the employees, authorizes neither the oppression nor destruction of the employer. When the law
angles the scales of justice in favor of labor, the scale should never be so tilted if the result is an injustice to
the employer.[15]
WHEREFORE, the petition is hereby DENIED. The resolution of the Court of Appeals dated January
31, 2001 is AFFIRMED.
No costs.
SO ORDERED.
THIRD DIVISION [G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners,
vs. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.
DECISION
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was seasonal in nature, they failed to
prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these
workers have served them for several years already. Hence, they are regular -- not seasonal -- employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February 20,
2001 Decision of the Court of Appeals[1] (CA) in CA-GR SP No. 51033. The dispositive part of the Decision reads:
WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED. [2]
On the other hand, the National Labor Relations Commission (NLRC) Decision, [3] upheld by the CA, disposed in this
wise:
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered
declaring complainants to have been illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except Luisa
Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position and to pay full backwages from September 1991
until reinstated. Respondents being guilty of unfair labor practice are further ordered to pay complainant union the sum of P10,000.00
as moral damages and P5,000.00 as exemplary damages.[4]
The Facts
The facts are summarized in the NLRC Decision as follows:
Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were choosy in the kind of
jobs they wanted to perform, the records is replete with complainants persistence and dogged determination in going back to work.
Indeed, it would appear that respondents did not look with favor workers having organized themselves into a union. Thus, when
complainant union was certified as the collective bargaining representative in the certification elections, respondents under the pretext
that the result was on appeal, refused to sit down with the union for the purpose of entering into a collective bargaining
agreement. Moreover, the workers including complainants herein were not given work for more than one month. In protest,
complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among
others that:
a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the same within
thirty (30) days.
b) The management will give priority to the women workers who are members of the union in case work relative x x x or amount[ing]
to gahit and [dipol] arises.
c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.
d) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be
given priority. However, in case the said workforce would not be enough, the management can hire additional workers to supplement
them.
e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to work in the hacienda; and
f) The union will immediately lift the picket upon signing of this agreement.
However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its commitment to sit down and bargain
collectively. Instead, respondent employed all means including the use of private armed guards to prevent the organizers from entering
the premises.
Moreover, starting September 1991, respondents did not any more give work assignments to the complainants forcing the union to
stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was signed by
the complainants and respondents which provides:
Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the union officials and
members;
Whereas parties to the present dispute agree to settle the case amicably once and for all;
Now therefore, in the interest of both labor and management, parties herein agree as follows:
1. That the list of the names of affected union members hereto attached and made part of this agreement shall be referred to the
Hacienda payroll of 1990 and determine whether or not this concerned Union members are hacienda workers;
2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a Memorandum of Agreement
entered into by and between the parties last January 4, 1990;
3. That herein parties can use other employment references in support of their respective claims whether or not any or all of the listed
36 union members are employees or hacienda workers or not as the case may be;
4. That in case conflict or disagreement arises in the determination of the status of the particular hacienda workers subject of this
agreement herein parties further agree to submit the same to voluntary arbitration;
5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be composed of three representatives each
and is given five working days starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union
representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)
Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as follows:
The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who received their 13th month pay. The
following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
The name Orencio Rombo shall be verified in the 1990 payroll.
The following employees shall be reinstated immediately upon availability of work:
1. Jose Dagle 7. Alejandro Tejares
2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr.
4. Jesus Silva 10. Cresensio Abrega
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.

When respondents again reneged on its commitment, complainants filed the present complaint.
But for all their persistence, the risk they had to undergo in conducting a strike in the face of overwhelming odds, complainants in an
ironic twist of fate now find themselves being accused of refusing to work and being choosy in the kind of work they have to perform.
[5]
(Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on
leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security of
tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither rhyme nor reason in petitioners argument that it was the workers themselves who
refused to or were choosy in their work. As found by the NLRC, the record of this case is replete with complainants
persistence and dogged determination in going back to work. [6]
The CA likewise concurred with the NLRCs finding that petitioners were guilty of unfair labor practice.
Hence this Petition.[7]
Issues
Petitioners raise the following issues for the Courts consideration:
A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provisions of Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the definition of regular employees under paragraph 1, nor
covered under paragraph 2 which refers exclusively to casual employees who have served for at least one
year.
B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, xxx, and relying instead on
rulings which are not directly applicable to the case at bench, viz, Philippine Tobacco,Bacolod-Murcia,
and Gaco, xxx.
C. Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRCs conclusion
that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and
that the union be awarded moral and exemplary damages. [8]
Consistent with the discussion in petitioners Memorandum, we shall take up Items A and B as the first issue and Item
C as the second.
The Courts Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on
certiorari of CA decisions.[9] Questions of fact are not entertained.[10]The Court is not a trier of facts and, in labor cases, this
doctrine applies with greater force.[11] Factual questions are for labor tribunals to resolve. [12] In the present case, these
have already been threshed out by the NLRC. Its findings were affirmed by the appellate court.
Contrary to petitioners contention, the CA did not err when it held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in natureand the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such activity exist. (Italics supplied)
For respondents to be excluded from those classified as regular employees, it is not enough that they perform work
or services that are seasonal in nature. They must have also been employed only for the duration of one season. The
evidence proves the existence of the first, but not of the second, condition. The fact that respondents -- with the exception
of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva -- repeatedly worked as sugarcane workers for
petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents for more than one
season. Therefore, the general rule of regular employment is applicable.
In Abasolo v. National Labor Relations Commission,[13] the Court issued this clarification:
[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which this Court held:
The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of
the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been
performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists.
xxxxxxxxx
x x x [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the x x x season does not
detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers
who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period,
but merely considered on leave until re-employed.[14]
The CA did not err when it ruled that Mercado v. NLRC[15] was not applicable to the case at bar. In the earlier case,
the workers were required to perform phases of agricultural work for a definite period of time, after which their services
would be available to any other farm owner. They were not hired regularly and repeatedly for the same phase/s of
agricultural work, but on and off for any single phase thereof. On the other hand, herein respondents, having performed
the same tasks for petitioners every season for several years, are considered the latters regular employees for their
respective tasks. Petitioners eventual refusal to use their services -- even if they were ready, able and willing to perform
their usual duties whenever these were available -- and hiring of other workers to perform the tasks originally assigned to
respondents amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CAs dismissal of what petitioners claim was their valid exercise of a
management prerogative. The sudden changes in work assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized themselves into a union and started demanding collective
bargaining. Those who were union members were effectively deprived of their jobs. Petitioners move actually amounted to
unjustified dismissal of respondents, in violation of the Labor Code.
Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and
authorized cause.[16] In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents who, as
discussed above, are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:
Indeed, from respondents refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew
from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one
cannot but conclude that respondents did not want a union in their haciendaa clear interference in the right of the workers to selforganization.[17]
We uphold the CAs affirmation of the above findings. Indeed, factual findings of labor officials, who are deemed to
have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even
finality. Their findings are binding on the Supreme Court. [18] Verily, their conclusions are accorded great weight upon
appeal, especially when supported by substantial evidence. [19] Consequently, the Court is not duty-bound to delve into the
accuracy of their factual findings, in the absence of a clear showing that these were arbitrary and bereft of any rational
basis.[20]
The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages. [21]
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno, J., (Chairman), Sand
FIRST DIVISION [G.R. No. 152427. August 9, 2005]

INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and GLEN SOLON,respondents.
DECISION
QUISUMBING, J.:
This petition for review assails the Decision[1] dated October 30, 2001 of the Court of Appeals and
its Resolution[2] dated February 28, 2002 in CA-G.R. SP No. 60136, denying the petitioners motion for reconsideration for
lack of merit. The decision affirmed the National Labor Relations Commission (NLRC) which declared private respondent
Glen Solon a regular employee of the petitioner and awarded him 13 th month pay, service incentive leave pay,
reinstatement to his former position with full backwages from the time his salary was withheld until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to
contract with its clients.[3]
Private respondent Solon worked for petitioner. His employment records is as follows:
December 14, 1994 up to January 14, 1995 St. Charbel Warehouse
February 1, 1995 up to April 30, 1995 St. Charbel Warehouse
May 23, 1995 up to June 23, 1995 St. Charbel Warehouse
August 15, 1995 up to October 31, 1995 St. Charbel Warehouse
November 2, 1995 up to January 31, 1996 St. Charbel Warehouse
May 13, 1996 up to June 15, 1996 Ayala Triangle
August 27, 1996 up to November 30, 1996 St. Charbel Warehouse[4]
July 14, 1997 up to November 1997 ICPWI Warehouse
November 1997 up to January 5, 1998 Cathedral Heights
January 6, 1998 Rockwell Center[5]
On February 23, 1998, while private respondent was about to log out from work, he was informed by the
warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated.
When private respondent went to the petitioners office on February 24, 1998 to verify his status, he found out that indeed,
he had been terminated. He went back to petitioners office on February 27, 1998 to sign a clearance so he could claim his
13th month pay and tax refunds. However, he had second thoughts and refused to sign the clearance when he read the
clearance indicating he had resigned. On March 6, 1998, he filed a complaint alleging that he was illegally dismissed
without just cause and without due process.[6]
In a Decision dated February 26, 1999, the Labor Arbiter ruled that private respondent was a regular employee and
could only be removed for cause. Petitioner was ordered to reinstate private respondent to his former position with full
backwages from the time his salary was withheld until his actual reinstatement, and pay him service incentive leave pay,
and 13thmonth pay for three years in the amount of P2,880 and P14,976, respectively.
Petitioner appealed to the National Labor Relations Commission (NLRC), which ruled:
WHEREFORE, prescinding from the foregoing and in the interest of justice, the decision of the Labor Arbiter is hereby AFFIRMED
with a MODIFICATION that the 13th month pay should be given only for the year 1997 and portion of 1998. Backwages shall be
computed from the time he was illegally dismissed up to the time of his actual reinstatement. Likewise, service incentive leave pay for
three (3) years is also awarded to appellee in the amount of P2,880.00.
SO ORDERED.[7]
Petitioners Motion for Reconsideration was denied.[8]
Petitioner appealed to the Court of Appeals, alleging that the NLRC committed grave abuse of discretion in finding
that the private respondent was a regular employee and in awarding 13 th month pay, service incentive leave pay, and
holiday pay to the private respondent despite evidence of payment. The said petition was dismissed for lack of merit. [9]
Before us now, petitioner raises the following issues: (1) Whether the respondent is a project employee of the
petitioner or a regular employee; and (2) Whether the Court of Appeals erred seriously in awarding 13 th month pay for the
entire year of 1997 and service incentive leave pay to the respondent and without taking cognizance of the evidence
presented by petitioner.[10]
The petitioner asserts that the private respondent was a project employee. Thus, when the project was completed
and private respondent was not re-assigned to another project, petitioner did not violate any law since it was petitioners
discretion to re-assign the private respondent to other projects. [11]
Article 280 of the Labor Code states:
The provisions of written agreement of the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is for the duration of the season (Italics supplied.)
We held in Tomas Lao Construction v. NLRC[12] that the principal test in determining whether an employee is a project
employee or regular employee, is, whether he is assigned to carry out a specific project or undertaking, the duration (and
scope) of which are specified at the time the employee is engaged in the project. [13] Project refers to a particular job or
undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable
from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. [14]
In our review of the employment contracts of private respondent, we are convinced he was initially a project
employee. The services he rendered, the duration and scope of each project are clear indications that he was hired as a
project employee.
We concur with the NLRC that while there were several employment contracts between private respondent and
petitioner, in all of them, private respondent performed tasks which were usually necessary or desirable in the usual
business or trade of petitioner. A review of private respondents work assignments patently showed he belonged to a work
pool tapped from where workers are and assigned whenever their services were needed. In a work pool, the workers do
not receive salaries and are free to seek other employment during temporary breaks in the business. They are like regular
seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is beneficial to both
the employer and employee for it prevents the unjust situation of coddling labor at the expense of capital and at the same
time enables the workers to attain the status of regular employees. [15] Nonetheless, the pattern of re-hiring and the
recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioners
business or trade.[16]
In Maraguinot, Jr. v. NLRC[17] we ruled that once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are
vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a
regular employee.
In this case, did the private respondent become a regular employee then?
The test to determine whether employment is regular or not is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has
been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law
deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability
of that activity to the business. [18] Thus, we held that where the employment of project employees is extended long after
the supposed project has been finished, the employees are removed from the scope of project employees and are
considered regular employees.[19]
While length of time may not be the controlling test for project employment, it is vital in determining if the employee
was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual
business or trade of the employer. Here, private respondent had been a project employee several times over. His
employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of
petitioners business.[20] Where from the circumstances it is apparent that periods have been imposed to preclude the
acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good
customs or public order.[21]
Further, Policy Instructions No. 20 requires employers to submit a report of an employees termination to the nearest
public employment office every time his employment was terminated due to a completion of a project. The failure of the
employer to file termination reports is an indication that the employee is not a project employee. [22] Department Order No.
19 superseding Policy Instructions No. 20 also expressly provides that the report of termination is one of the indications of
project employment.[23] In the case at bar, there was only one list of terminated workers submitted to the Department of
Labor and Employment.[24] If private respondent was a project employee, petitioner should have submitted a termination
report for every completion of a project to which the former was assigned.
Juxtaposing private respondents employment history, vis the requirements in the test to determine if he is a regular
worker, we are constrained to say he is.
As a regular worker, private respondent is entitled to security of tenure under Article 279 of the Labor Code [25] and
can only be removed for cause. We found no valid cause attending to private respondents dismissal and found also that
his dismissal was without due process.
Additionally, Article 277(b) of the Labor Code provides that
... Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just
and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment
The failure of the petitioner to comply with these procedural guidelines renders its dismissal of private respondent,
illegal. An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and to his
other benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement,
pursuant to Article 279 of the Labor Code.
However, we note that the private respondent had been paid his 13 th month pay for the year 1997. The Court of
Appeals erred in granting the same to him.
Article 95(a) of the Labor Code governs the award of service incentive leave. It provides that every employee who
has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay, and
Section 3, Rule V, Book III of the Implementing Rules and Regulations, defines the term at least one year of service to
mean service within 12 months, whether continuous or broken reckoned from the date the employee started working,
including authorized absences and paid regular holidays, unless the working days in the establishment as a matter of
practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be
considered as one year. Accordingly, private respondents service incentive leave credits of five days for every year of
service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be
computed up to the date of reinstatement pursuant to Article 279 of the Labor Code. [26]
WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of the
Court of Appeals in CA-G.R. SP No. 60136, are AFFIRMED with MODIFICATION. The petitioner is hereby ORDERED to
(1) reinstate the respondent with no loss of seniority rights and other privileges; and (2) pay respondent his backwages,
13th month pay for the year 1998 and Service Incentive Leave Pay computed from the date of his illegal dismissal up to
the date of his actual reinstatement. Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

Labor Law Cases1

Cargado por

Información del documento

Derechos de autor

Formatos disponibles

Compartir este documento

Compartir o incrustar documentos

Opciones para compartir

¿Le pareció útil este documento?

¿Este contenido es inapropiado?

Copyright:

Formatos disponibles

Labor Law Cases1

Cargado por

Copyright:

Formatos disponibles

FIRST DIVISION

[G.R. No. 159890. May 28, 2004]

A&B Engineering Services

FIRST DIVISION [G.R. No. 145443. March 18, 2005]

COCA COLA BOTTLERS (PHILS.), G.R. No. 146881

5. To give family planning motivations.

Respondent filed a petition for review with the Court of Appeals.

The dispositive portion of the Decision reads:

Pay petitioner moral damages in the amount of P50,000.00.

Pay petitioner exemplary damages in the amount of P50,000.00.

Hence, this petition filed by Coca-Cola Bottlers Phils., Inc.

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED

G.R. No. 160854

QUISUMBING, J., Chairperson,

The instant petition arose from the following factual antecedents:

THIRD DIVISION [G.R. No. 149859. June 9, 2004]

G.R. No. 157029

The antecedent facts are as follows:

Anent the final issue, petitioners arguments ring hollow.

G.R. No. 149329

PUNO, J., Chairman,

July 12, 2004

CALLEJO, SR., J.:

Declaring respondent corporation guilty of illegally dismissing

Ordering respondent corporation to pay the said complainants their 13th

Ordering respondent corporation to pay said complainants the amount

The Present Petition

The Ruling of the Court

G.R. No. 148102

-versusM.Y. SAN BISCUITS, INC. and

July 11, 2006

Bernardino Labayog, Luningning Angeles

The petition is denied for lack of merit.

The Labor Code states:

THIRD DIVISION [G.R. No. 149440. January 28, 2003]

6. Ernesto Tejares 12. Ariston Eruela Jr.

FIRST DIVISION [G.R. No. 152427. August 9, 2005]

También podría gustarte